Bitrabo Editorial
The price of Bitcoin remains steady but is below the critical $72,000 mark, prompting some analysts to question the sustainability of its current uptrend despite being up around 20% from the lows in May 2024.
Bitcoin’s Momentum Under Scrutiny
Analysts suggest that Bitcoin’s current uptrend might be among the weakest in its history, especially when compared to the performance seen in 2021 and 2017 using the Market Value to Realized Value (MVRV) ratio.
The MVRV ratio compares Bitcoin’s market cap to the total realized cap of all BTC in circulation and tends to fluctuate with price movements. High MVRV ratios historically coincide with market peaks, implying potential overvaluation by investors. Current MVRV levels are deemed significant compared to past bull cycles, suggesting a lackluster rally.
Two scenarios are outlined for Bitcoin’s future prices – either a subdued uptrend leading to a downtrend or a precursor for further gains. Trader commitment and sentiment changes are key factors required for bullish momentum towards new all-time highs above March 2024 levels.
Factors Favoring BTC Bulls
Despite current price levels, analysts argue that BTC is undervalued. Factors such as increasing spot Bitcoin exchange-traded fund (ETF) demand and potential Financial Accounting Standards Board (FASB) rule changes by year-end could boost Bitcoin adoption among institutions and drive prices higher.