Is Bitcoin bull run in jeopardy despite bullish sentiment among long-term BTC holders?


Share:
  • Bitcoin supply in loss reached an eight-month low of 6.1 million BTC, indicating that asset holders could sell their holdings while profitable. 
  • Bitcoin velocity, a metric that measures how quickly BTC is circulating, declined since January 9; wallet addresses are holding on to their BTC.
  • BTC price has been volatile, driven by trader sentiment, and technical indicators MVRV and RPV ratio. 

Bitcoin price witnessed increased volatility in the last seven days (since January 16) driven by a mix of factors, including trader sentiment, Bitcoin velocity, and various technical indicators, like the MVRV and RPV ratios.

According to data from technical indicators, the enthusiasm among bulls is on a decline and the asset is currently overvalued. Bitcoin’s bull run is in jeopardy, unless positive sentiment among BTC holders drives the cryptocurrency’s price higher. 

Also read: Bitcoin, Ethereum, XRP and Cardano have more meat on the bone, rank in undervalued assets in 2023

Have Bitcoin bulls lost enthusiasm, according to MVRV and RPV ratios?

The MVRV ratio, or Market Value to Realised Value ratio, is a useful metric for gauging the current price of Bitcoin relative to its historical value. It takes into account the total market capitalization of Bitcoin, as well as its realized capitalization, which is the price that investors have actually paid for their Bitcoin

Bitcoin MVRV

Bitcoin MVRV

When the MVRV ratio is high, it indicates that the price of Bitcoin is overvalued, while a low ratio suggests that the price is undervalued. Currently, the MVRV ratio is higher than it was at the start of the week, indicating that Bitcoin may be overvalued. 

Bitcoin’s Profits-to-Value Ratio (RPV) declined significantly over the last seven days. This ratio compares profit-taking in the market against the valuation of the Bitcoin network and suggests enthusiasm for the BTC bull run has declined. 

Bitcoin RPV ratio

Bitcoin RPV ratio

The two technical indicators suggest that the BTC bull run is likely in jeopardy. In addition to the MVRV and RPV ratios, Bitcoin velocity is another important indicator of the current market sentiment. 

Bitcoin velocity signals sentiment among BTC traders is bullish

Bitcoin velocity measures the rate at which Bitcoin is exchanged between market participants. When Bitcoin velocity is high, it indicates that traders are actively trading Bitcoin and that the market sentiment is bullish. Currently, Bitcoin velocity is higher than it was at the beginning of the week, suggesting that traders are bullish on the cryptocurrency.

Bitcoin velocity

Bitcoin velocity

Finally, the overall trader sentiment is also highly influential in determining the current value of Bitcoin. When the sentiment among traders is positive, the narrative is bullish and it is likely to drive demand for the asset. According to data provided by Coinglass, 51.2% of all open positions were long on Bitcoin. This implies that traders are still optimistic about the future of Bitcoin and believe that it will continue to rise in value. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

This is why a mere 15% rally in Lido DAO price could be a game-changer for LDO holders

This is why a mere 15% rally in Lido DAO price could be a game-changer for LDO holders

Lido DAO price is following the rest of the market due to the regulatory events that transpired in the last few days. However, the DeFi token is generally unlikely to pursue the path set by any other cryptocurrencies, including the likes of Bitcoin. This might play in favor of LDO.

More Lido News

LINK holders opt to sell as Chainlink price falls by 9% in a week, new investors on the rise

LINK holders opt to sell as Chainlink price falls by 9% in a week, new investors on the rise

Chainlink price, after following the broader market cues, is nearing a key support level that was last visited by the coin in January this year. This has discouraged LINK holders to the point where selling has become a preferred option. However, newer investors are countering this selling by accumulating, preventing a severe decline.

More Chainlink News

Optimism price could rally 50% as network upgrade inspires new wave of OP adoption

Optimism price could rally 50% as network upgrade inspires new wave of OP adoption

Optimism (OP) price appears to have found support after a new buyer congestion zone came into effect to prevent the free fall. Accordingly, the Ethereum Layer 2 (L2) token is trading horizontally, giving bulls time to accumulate OP at affordable rates.

More Optimism News

Binance CEO addresses chat records disclosed by the SEC

Binance CEO addresses chat records disclosed by the SEC

Binance CEO Changpeng Zhao has issued an internal address to company staff, asking them to focus on work and developing products people can use. The internal memo comes after the United States Securities and Exchange Commission (SEC) disclosed chat records between Binance employees in an attempt to support its case against the largest crypto exchange by trading volume.

More Cryptocurrencies News

Top 3 cryptocurrencies that outperformed Bitcoin, Ethereum this week

Top 3 cryptocurrencies that outperformed Bitcoin, Ethereum this week

The US Securities and Exchange Commission’s (SEC) crackdown on cryptocurrencies triggered a correction in the prices of Bitcoin, Ethereum and several altcoins with large market capitalization. 

Read full analysis

BTC

ETH

XRP