Indeed, Bitcoin’s price performance has been one of the highest points in the cryptocurrency landscape in recent weeks. However, the major cryptocurrency did not have a dream start to the novel month, which has sparked discussions about the coin’s history in August.
Interestingly, the blockchain technology firm suggested that the value of bitcoin may not be all that bad, as the market leader could see a price rebound in the next few days.
Bitcoin Price Could Be Bottoming — Here’s What’s Next
The well-known cryptocurrency analysis platform Santiment has revealed that a “relief rally” could be just around the corner for BTC price. This positive outlook comes after what has been a tardy week for the flagship digital asset and other large-cap cryptocurrencies.
Santiment’s price rebound prediction is based on the intraday MVRV (Market Value to Realized Value) indicator, which measures the average profit/loss of Bitcoin holders over a given day. This indicator is particularly used to identify BTC undervaluation or overvaluation.
When the MVRV indicator is above 0%, it means that more traders are making a profit. Historically, traders have shown a tendency to sell their assets when they are in the black. Meanwhile, an MVRV indicator below 0% signals that more traders are making losses and that Bitcoin is probably undervalued.
Bitcoin MVRV ratio falls below 0% | Source: Santiment/X
As shown in the chart above, Bitcoin’s MVRV is currently below zero at -5.5%, indicating that the leading cryptocurrency may currently be undervalued. Typically, low MVRV rates are associated with an opportunity to buy at rock bottom prices.
What’s more, Bitcoin’s price has historically risen when the market value to realized value ratio has fallen to current levels. On July 4 and July 25, the leading cryptocurrency’s price rose 7% and 9%, respectively, as the MVRV ratio fell to -5%.
In a post about X, Santiment highlighted that other large-cap crypto assets are in a similar situation to Bitcoin. These cryptocurrencies, including ETH, ADA, XRP, DOGE, and LINK, have the potential to rebound in price following the MVRV indicator’s intraday decline.
Bitcoin price in brief
At the time of writing, Bitcoin is trading at around $61,300, reflecting a drop of over 5% over the past day. Meanwhile, the flagship cryptocurrency has fallen by almost 10% over the past week, according to data from CoinGecko.
The Bitcoin price falls beneath the $62,000 level on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
