On-chain data shows the Bitcoin Market Value to Realized Value (MVRV) Ratio of short-term holders is currently undergoing a retest that could prove significant for the BTC price.
Bitcoin STH MVRV Ratio Is Retesting Its 155-Day MA Currently
As explained by the on-chain analyst Checkmate in a new post on X, the short-term owner of the MVRV Ratio breaking above the 155-day moving average (MA) can lead to a bullish action for Bitcoin.
The MVRV Ratio is a popular indicator that, in short, tracks how much BTC investors hold in total (ie, the market cap) compared to the amount they initially invested (guaranteed cap). If the value of this metric is greater than 1, it means that the average address in the network can be considered to be profitable at the moment. On the other hand, being below the threshold suggests the dominance of losses in the market.
In the context of the current article, the MVRV ratio of only a specific segment of the sector is of interest: short-term holders (STHs). STHs include investors who bought their coins in the last 155 days. Thus, the MVRV Ratio of this group tells us about the profit/loss situation of the consumers from the last five months.
Now, here is a chart showing the trend in the Bitcoin STH MVRV Ratio over the past few years:
As shown in the graph above, the Bitcoin STH MVRV ratio has increased recently as the recent rally in the price of the cryptocurrency has taken place. With this increase, the index is just above the 1 mark, which means that profits have returned to the group. More importantly, however, the metric is now trying to find a break above its 155-day MA. As Checkmate highlighted on the chart, BTC generally tends to enjoy some momentum whenever the STH MVRV Ratio crosses above this line.
The last time this type of crossover happened in the index was back in the first half of this year and what followed was a rally of the coin to a new all-time high (ATH).
Given the precedent, it is possible that BTC will see another bullish wave, if the STH MVRV Ratio manages to cross its 155-day MA. “If the bulls get their way, and we set a weekly high of ~$65.3k, I would expect an ATH attempt,” the analyst noted.
Checkmate also cautions, however, that profit taking for these investors may be cautious once the price reaches the $66,100 to $70,800 range. This is because, these investors, who do not like to have a strong decision, can enter a significant profit at those levels.
BTC price
Bitcoin saw a jump of about 8% last week, taking its value to the $63,700 level.