Daily News 19

Tag: MVRV Z-Score

  • Bitcoin Warning: Signal That Failed in Past Bull Runs Flares Up Again

    Bitcoin Warning: Signal That Failed in Past Bull Runs Flares Up Again

    Bitcoin MVRV Z-Score Nears Critical 365-Day Average, CryptoQuant Signals Potential Regime Shift

    Cryptocurrency analytics platform CryptoQuant reports that Bitcoin’s MVRV Z-Score is approaching its 365-day moving average — a level that has historically marked major market regime changes. While the indicator is trending toward this threshold, the current reading does not yet confirm the start of a new bull market.

    Historical Significance of the 365-Day Moving Average Breakout

    According to CryptoQuant’s analysis, a sustained break above the 365-day moving average on the MVRV Z-Score has previously signaled a transition from a recovery phase to an expansion phase. The firm highlights three prior instances:

    • The 2015–2016 breakout preceded the 2017 bull market.
    • The 2020 move came ahead of the 2020–2021 rally.
    • The 2023 recovery aligned with the final expansion period of that cycle.

    If Bitcoin clears and holds above this level, it could reflect a resurgence of unrealized profits across the network and the beginning of a new expansion regime. Conversely, a rejection would suggest overall market profitability remains insufficient to support a broader bull run.

    Current Cycle Shows Structurally Shallower Correction

    A key distinction in the current cycle is that the MVRV Z-Score did not fall below zero during the recent pullback — unlike at previous major cycle lows, where the indicator entered a low-valuation zone. CryptoQuant notes this could mean one of two things:

    • Bitcoin is experiencing a structurally shallower correction.
    • A capitulation event on the scale of prior macro lows may not yet be complete.

    Additionally, the MVRV Z-Score has formed lower peaks in each successive cycle. This trend suggests that even as Bitcoin’s price reaches higher highs, the market’s valuation excesses are becoming progressively more limited over time.

    Risk Assessment: Key Levels to Watch

    CryptoQuant outlines the following scenarios for market direction:

    • Bullish scenario: MVRV Z-Score reclaims and sustains above the 365-day moving average.
    • Repair regime: Rejection at the 365-day average indicates the market remains in a repair phase.
    • Correction not complete: A move back toward zero would reinforce the view that the current correction process is unfinished.

    This analysis is for informational purposes only and does not constitute investment advice.

  • Bitcoin Gains Continue, but One Analyst Remains Cautious: “I Haven’t Seen What I’m Looking For Yet”

    Bitcoin Gains Continue, but One Analyst Remains Cautious: “I Haven’t Seen What I’m Looking For Yet”

    Bitcoin’s recent cryptocurrency market recovery has revived bullish expectations, but on-chain data suggests the market may still face further downside. Alphractal founder Joao Wedson said Bitcoin may not have reached the cycle’s ultimate price bottom, warning that the BTC price could fall to $53,000 or lower if historical patterns repeat.

    Wedson’s analysis focused on the MVRV Z-Score, an on-chain indicator used to assess market value, realized value and investor behavior. He said on-chain metrics reflect how investors behave during periods of market euphoria and fear, making them relevant for evaluating Bitcoin’s broader market cycles.

    Bitcoin’s 2018 Crash Offers a Historical Comparison

    Wedson compared Bitcoin’s current market structure with the 2017–2018 cycle. According to his analysis, the MVRV Z-Score formed three major peaks during the 2017 bull market before Bitcoin reached its all-time high.

    After Bitcoin peaked and began to decline, the indicator formed a base between approximately 0.25 and 1.16. Wedson noted that many market participants did not expect another sharp drop at the time. However, Bitcoin fell again in November 2018, reaching approximately $3,180.

    During the 2024–2025 period, the MVRV Z-Score also formed three separate peaks, Wedson said. He added that enthusiasm around those peaks was more limited than in 2017 because the market had become more complex than in previous cycles.

    Following Bitcoin’s recent decline from its peak, the MVRV Z-Score formed a base in an area similar to the one observed in 2018. Wedson said the indicator has recently risen again, with Bitcoin’s price moving higher alongside it.

    “MVRV Z-Score Has Not Yet Fallen into Negative Zone”

    Wedson identified the indicator’s failure to enter the negative zone as the primary risk. Historically, that zone has been associated with major Bitcoin cycle lows.

    Wedson stated that based on the available data, he constantly asked himself the same question: If the MVRV Z-Score needs to go down, will the Bitcoin price follow the indicator?

    Based solely on on-chain data, the Alphractal founder said there are not enough signals to confirm that Bitcoin’s current decline represents the ultimate market bottom.

    Wedson said Bitcoin may need to fall to at least approximately $53,000 or even lower for the conditions he is monitoring to be met.

    The analyst emphasized that his assessment was not financial advice. He said it was a direct examination of the data rather than a challenge to the current bullish narrative in the market.

    Recalling that most market participants also did not anticipate another sharp decline in 2018, Wedson said the key question was whether the current Bitcoin cycle would end in a similar way to previous cycles.

    At this stage, Wedson said, on-chain indicators point to continuing downside risks rather than definitively confirming that “the bottom has been reached” for Bitcoin.

    This is not investment advice.