Bitcoin Enters High-Risk Zone, Expected to Surge Further
Date: 2024-02-12 Author: Dima Zakharov Categories: BLOCKCHAIN
Bitcoin's price has entered a high-risk zone, poised for even greater gains, according to experts at cryptocurrency analytics firm Glassnode.
The MVRV indicator, reflecting the ratio of Bitcoin's market capitalization to its realized capitalization, has reached its highest level since June 2022 at 2.06. Historical data suggests that a rise in MVRV to this level during an uptrend signifies the imminent start of a strong bullish trend.
The increase in Bitcoin's price has driven the MVRV indicator into the risk zone. A value of 2.06 means that cryptocurrency holders who bought coins, for example, a year ago, would earn a profit of 106% by selling BTC at the current price.
Consequently, the higher the MVRV rises, the more profit long-term investors can make, and the more likely they are to dispose of assets.
Many analysts attribute the rise in BTC's price to high demand for Bitcoin ETFs, which have already attracted $10 billion in investments. Furthermore, on February 9, the outflow of capital from the Grayscale Bitcoin Trust (GBTC) dropped to a minimum of $51.8 million. In January, within nine days of GBTC's conversion to Bitcoin ETFs, the derivative's capitalization decreased by $4.4 billion.
