Bitcoin MVRV Ratio Failed to Reach Peak Numbers as BTC Hits New ATH

Bitcoin traded above $111,000 to record a new all-time high (ATH) in the past week, as the crypto bull run revival continues

Bitcoin (BTC) price action continues to heat up as the crypto market experiences a slight downturn. The recent buildup to new all-time highs (ATHs) has largely been driven by anticipation of the U.S. Government's announcement of potential new trade tariffs.

While the apex cryptocurrency has since experienced some retracement, investors remain bullish, especially if the previous ATH is successfully reclaimed, which would strongly signal a continuation of the current uptrend.

Interestingly, crypto analyst BilalHuseynov has observed an uncommon development with the Market Value To Realized Value ratio (MVRV) that indicates a positive difference with the current bull cycle from others.

Bitcoin MVRV Stays At 2.4 Amid New ATH – What Could This Mean?

In a QuickTake post on May 23, BilalHuseynov shares an interesting insight on the Bitcoin market following recent on-chain development. Notably, the premier cryptocurrency hit a new all-time high at $111,970 on May 22 to ultimately confirm the validity of the current bull cycle.

Amidst this bullish development, BilalHuseynov notes an unusual event in that the MVRV ratio failed to reach the peak numbers associated with when Bitcoin set a new ATH in previous bull cycles. For context, the MVRV measures the market cap of Bitcoin to the realized cap, i.e, the value of all Bitcoin at the last point of purchase. It is used to indicate trend reversals, as an MVRV ratio over 1 suggests overvaluation while a figure below 1 signals undervaluation.

According to BilalHuseynov, when Bitcoin achieved a new ATH in 2013, 2017, and 2021 bull cycles, the MVRV ratio reached top values between 3.5-4.0. However, following the eclipse of the $109,000, the MVRV ratio has hit a peak value of 2.4. The crypto analyst explains that the reduced MVRV number can be linked to a disproportionate rise in Realized Cap compared to the Market Cap. This development can be attributed to the fact that a high volume of circulating Bitcoin exchanged hands at higher prices, thereby resulting in a higher cost basis.

Interestingly, BilalHuseynov explains that this unusual development is a positive signal for Bitcoin’s long-term development, indicating a stable market even at ATH prices, that possesses less froth and no hype-driven overvaluation. Furthermore, there is the possibility that stronger market hands, i.e, long-term holders and institutional holders, are part of this new investors, suggesting long-term market confidence with no urgency for profit-taking.

BTC Price Overview

At the time of writing, Bitcoin is trading at $108,397 following the retracement in the past days. The premier cryptocurrency is down by 2.50% in the past day but up by 17.65% in the past month.