In early trading on Sunday, Bitcoin, Ethereum and the rest of the cryptocurrency market recorded profit-taking, with around $252 million reported in cryptocurrency liquidations.
Consequently, Bitcoin fell to a low of $101,221 before recovering to an intraday high of $103,292. However, at the time of writing, it had trimmed some of its gains but was still up 1.6% in the last 24 hours at $102,796.
Ethereum fell to a low of $3,831 early in the session on Sunday, extending its decline since trading on Saturday. This drop was responded to with purchases and ETH recovered to reach intraday highs of $3,906.
Ethereum has been targeting $4,000 for the past four days, with the bulls’ attempt stalling just above $3,900.
On the other hand, Bitcoin is repeatedly testing the resistance above $100,000, increasing the likelihood of a breakout. While the market remains bullish on both crypto assets, MVRV, an essential indicator for predicting market highs and identifying lows, suggests what could happen next for BTC and ETH.
What the MVRV Indicator Suggests
In a recent analysis, on-chain analysis platform IntoTheBlock explores the MVRV indicator against major cryptocurrencies including Bitcoin and Ethereum.
The market value to realized value ratio (MVRV) is a critical metric for timing cryptocurrency market cycles and identifying potential highs. This ratio shows whether the price is higher or lower than what investors have paid on average, indicating overvalued or undervalued conditions.
The MVRV index is a valuable indicator for identifying market highs and lows.
In this article, we provide an overview of several top assets👇https://t.co/GmugzS1VGR
– IntoTheBlock (@intotheblock) December 14, 2024
According to IntoTheBlock, historically, Bitcoin finds its market bottom when the MVRV index falls below 1 and peaks when it exceeds 3. Each cycle has demonstrated a decline in the maximum MVRV, indicating that future spikes in indexes may occur. lower.
Bitcoin’s MVRV is at 2.5, indicating that the market is heating up, but it is still a long way from reaching its top.
However, Ethereum’s MVRV presents a complex picture due to strong initial increases that quickly generated profits for early buyers. Historically, Ethereum’s bear market MVRV has been around 0.7, with a peak of 2.7 in the past cycle. Its current MVRV of 1.76 implies that it has room to continue rising before reaching maximum valuation levels.
