Bitcoin, Ethereum Price in Red Amid $252 Market Sell-Off, What Indicators Say
2024-12-15
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In early Sunday trade, Bitcoin, Ethereum and the rest of the crypto market saw profit-taking, with about $252 million reported in crypto liquidations.
Bitcoin consequently fell to a low of $101,221 before recovering to an intraday high of $103,292. However, at the time of writing, it had pared some of its gains but was still up 1.6% in the last 24 hours to $102,796.
Ethereum fell to a low of $3,831 in the early Sunday session, extending its decline from Saturday's trade. This decline was met with buying, and ETH rebounded to intraday highs of $3,906.
Ethereum has been aiming to reach $4,000 for the last four days, with the bulls' attempt stalling just above $3,900.
On the other hand, Bitcoin is repeatedly testing resistance above $100,000, increasing the likelihood of a breakout. While the market remains optimistic on both crypto assets, MVRV, an essential indicator for predicting market tops and identifying bottoms, suggests what might come next for BTC and ETH.
What MVRV indicator suggests
In a recent analysis, on-chain analytics platform IntoTheBlock explores the MVRV indicator in respect to 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 tops. This ratio shows if the price is higher or lower than what investors have paid on average, indicating overvalued or undervalued conditions.
The MVRV ratio is a valuable indicator for pinpointing market tops and bottoms.
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According to IntoTheBlock, historically, Bitcoin finds its market bottom when the MVRV ratio falls below 1 and peaks when it exceeds 3. Each cycle has demonstrated a decline in peak MVRV, indicating that future peaks may occur at lower ratios.
Bitcoin's MVRV is at 2.5, indicating that the market is warming but is still a long way from reaching its top.
However, Ethereum's MVRV paints a complex picture due to strong early increases that quickly put initial buyers in profit. Historically, Ethereum's bear market MVRV has been about 0.7, with a peak of 2.7 in the past cycle. Its present MVRV of 1.76 implies that it has room to rise further before hitting peak valuation levels.