BTC Recovery: Can BTC Stop Falling to $41,000 with this Surge?
BTC has rebounded in the past 24 hours, which may have prevented the significant dump it faced earlier. BTC experienced a big dump a few days ago, but it has shown a bullish trend since the beginning of this week, and its price seems to have regained momentum, rising to $57,000.
In the past 24 hours, pump 4% completely retraced the price before the big dump. Perhaps more importantly, this pump helped the asset to gain some distance on the important pricing levels in the on-chain model. Analyst Ali Martinez discussed in an article yesterday how BTC is retesting part of the MVRV extreme bias pricing band model's support level.
As the name suggests, this model is based on the popular Market Value to Realized Value (MVRV) ratio. This indicator tells us how the value held by BTC investors (i.e. Market Cap) compares to the value of the assets they have invested (Realized Market Cap).
When this ratio is greater than 1, investors are in a net profit state, and when it is less than this ratio, it means the market is mainly in a loss state.
The MVRV extreme deviation pricing range model uses the average of this indicator and relates the standard deviation (SD) to the price of Cryptocurrency. Here is the model chart shared by the analyst yesterday. BTC retested the level of $54,200 yesterday, which corresponds to the price at which the MVRV ratio reaches the same level as its historical average.
If BTC is rejected at this level and falls below it, from a model perspective, the next important level will be $41,100. At this level, BTC's MVRV ratio will assume its average value is -0.5 SD.
Ali has pointed out that BTC may face a pullback to this level. However, with the recovery in the past 24 hours, this direct threat of decline may no longer loom over the head of Crypto Assets.
In terms of potential resistance levels in the future, the next BTC MVRV pricing range is around $67,400, so there is still quite some time before retesting.
(Data source: Keshav Verma)
