Bitcoin is Entering its Bull Phase – CryptoQuant CEO
CryptoQuant CEO shared his view on Bitcoin’s current trajectory and is confident that the flagship cryptocurrency is poised for a major breakout.
Ki Young Ju, a Bitcoin analyst and cofounder of crypto analytics company CryptoQuant recently shared on Twitter that BTC “entered into the early bull phase” and is expecting an upward momentum.
Since the beginning of January, Bitcoin has been going through a very positive period in which the price grew over 40% and broke past the $24,000 barrier.
Despite this surge, the crypto market has a long way to go until it recovers from 2022’s rough macroeconomic headwinds and the fallout after the crash of Terra (LUNA) and FTX. Last year Bitcoin fell to a low of around $15,500 before climbing back up again.
Nevertheless, we witnessed some serious gains last month, and the bullish sentiment spread across the community.
MVRV ratio
Young noted that although there is a possibility of a short-term pullback, chances are that prices will continue to rise. CryptoQuant’s CEO said that most investors are currently at a loss, which means that the chances of a selloff are slim, according to the MVRV ratio.
MVRV (Market Value to Realized Value) is a cryptocurrency metric that compares the current market value of an asset to its realized value. The realized value is calculated as the sum of all historical transaction prices of an asset, taking into account the time-weighted average of the holdings. It basically measures the potential gains or losses of a particular cryptocurrency based on the current market value compared to the average price an individual has paid for the token. A high MVRV ratio suggests an asset may be overvalued, while a low ratio may suggest an asset is undervalued.
When MVRV is above 3.7, it means that the asset is overvalued, and we are near the top. When the indicator is below 1, the asset is undervalued, and we are near the bottom. The metric recently showed a result of 1.07, which signals the beginning of a bull market.
Incoming bull market?
Young added that nobody would want to sell at a significant loss, and if someone does sell a lot of his holdings, it is highly possible to be a forced or unwanted action due to bankruptcy, government-seized coins, etc.
READ MORE: Litecoin is Ready for a Parabolic Rally, According to Top Analyst
He also stated that, most likely, wealthy investors will buy troubled Bitcoin mining companies and their holdings at a discount this year. This will probably prevent further miner capitulation, which could be the spark needed to ignite the next bull run.
“BTC miner capitulation might play out differently this time. Less likely, but it could be bullish if someone(s) acquires US-based Bitcoin mining companies and their crypto holdings at a significant discount this year,” he said.
Currently, 32% of Bitcoin’s total supply is underwater. According to CryptoQuant, “every time the supply in loss reaches values above 50%, capitulations occur, and price bottoms can be identified along Bitcoin’s history.”
With the supply of BTC in loss hitting 9-month low crypto investors are seeing the light at the end of the tunnel, and positive sentiment is thriving in the market.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
