Key Points
- Bitcoin’s price recovers above $97,000 after a slump to $94,000.
- Movement of dormant coins and MVRV ratio change suggest influence of long-term holders on market trends.
Bitcoin [BTC] saw a marked change in momentum after its price dipped to $94,000 last week.
On the early morning of February 10th, BTC began its recovery, climbing above $97,000, marking a 2.3% increase from the previous day.
Network Metrics and Market Trends
Despite this positive upward movement, a thorough analysis of the network’s underlying metrics provides more insight into the potential future direction of the leading cryptocurrency.
CryptoQuant’s recent analysis highlighted a significant movement on the Bitcoin network. On February 10th, roughly 14,000 Bitcoins, dormant for seven to ten years, were suddenly moved.
Notably, these coins weren’t sent to exchanges, suggesting they weren’t meant for immediate liquidation.
Bitcoin’s MVRV Ratio and its Market Impact
The MVRV (Market Value to Realized Value) ratio, which measures the market capitalization of Bitcoin against its realized value, also provided valuable insights into Bitcoin’s market health.
The MVRV ratio can indicate whether the asset is overvalued or undervalued at current price levels.
CryptoQuant’s recent data also revealed a downward trend in Bitcoin’s MVRV ratio, aligning with its recent price declines.
On January 21st, the MVRV ratio stood at 2.52. However, following the drop in BTC’s market price, it had fallen to 2.23 as of February 9th.
Historically, a dip in the MVRV ratio has signaled potential entry points for long-term investors. However, if the ratio continues to decline, it may suggest continuing market weakness or investor caution.