Bitcoin (BTC) needs to go lower before putting in a macro bottom, one of the market’s most accurate indicators shows.
Data from sources including on-chain analytics firm Glassnode shows Bitcoin’s MVRV-Z Score is almost — but not quite — signaling a price reversal.
MVRV-Z Score inches towards macro bottom
Amid ongoing debate whether if, or when, BTC/USD will go beyond its current macro lows of $17,600, new figures suggest that the market easily has further to fall.
As noted by Filbfilb, co-founder of trading suite Decentrader, the MVRV-Z score is now in its classic green zone, but not yet at the point which has accompanied price bottoms in the past.
MVRV-Z measures how high or low the Bitcoin spot price is relative to what is referred to as its “fair value.”
It uses market cap and realized price data along with standard deviation to create what has turned out to be one of the most efficient Bitcoin top and bottom prediction tools.
MVRV-Z has caught every macro top and bottom on BTC/USD in its history, and done so with an accuracy of two weeks, data resource LookIntoBitcoin notes.
The metric has only gone below its green zone a handful of times, the last being in March 2020, but more downside pressure would deliver a repeat performance.
“This chart is *the one* for me,” Filbfilb commented about the latest readings.
“We normally bottom when MC
Bitcoin MVRV-Z Score chart. Source: Glassnode
$16,000 bottom zone gains traction
$15,600 would tie in with various existing predictions of where Bitcoin is due to bottom.
In an update to Twitter followers at the weekend, meanwhile, popular account CryptoBullet included that area as one of several important support zones to watch.
$16,000, it confirmed, also marks the average deviation from Bitcoin’s 50-month moving average.
Some very important #BTC levels:
16k – Average Deviation from MA50 (-25%)
14k – 2019 Echo Bubble Top
12.2k – Celsius Liquidation
10.7k – Key Horizontal Level https://t.co/hEcnj8wsak pic.twitter.com/1Xke0F7WSe
— CryptoBullet (@CryptoBullet1) July 2, 2022
Bitcoin’s relative strength index, or RSI, is already at its lowest ever, another indication of the oversold nature of a market now below its previous halving cycle’s peak of nearly $20,000.
Source: Cointelegraph
