Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin’s Market Value to Realized Value (MVRV) ratio, a key valuation metric, has recently exhibited a “death cross,” signaling a potential “macro reversal” and weaker momentum for the cryptocurrency. This bearish crossover, which previously occurred at the 2021 cycle peak before a significant price drop, suggests that Bitcoin’s recent all-time high of $124,500 might be a cycle top, according to some analysts. However, other onchain indicators present a contrasting view, suggesting the rally still has room to grow before reaching an ultimate peak.
MVRV Death Cross Signals Exhaustion
The MVRV ratio, which assesses whether Bitcoin is overvalued or undervalued, recently showed a “death cross” between its 30-day and 365-day moving averages. CryptoQuant analyst Yonsei_dent noted this indicator suggests “MVRV momentum is showing signs of exhaustion,” indicating a potential shift in market sentiment.
Historically, this bearish crossover has been a significant precursor to major market corrections. The last instance was at Bitcoin’s 2021 cycle top, which preceded a substantial 77% decline from $69,000 to $15,500 during the 2022 bear market. Analyst Ali Martinez also highlighted this “death cross” on X, stating it “signals a macro momentum reversal from positive to negative.”
Despite Bitcoin’s price rising from $109,000 to $124,500 between January and August, the MVRV metric simultaneously declined, indicating a “weakening capital inflow.” Should historical patterns repeat, analysts project short-term price targets for Bitcoin around $105,000, with some even forecasting a drop to $60,000 if a prolonged bear market takes hold.
Contrasting Indicators Suggest Further Upside
Despite the bearish MVRV signal, several other onchain indicators suggest that Bitcoin’s recent all-time high of $124,500 is unlikely to be the definitive cycle top. For example, all 30 of CoinGlass’ bull market peak signals currently show no signs of market overheating, indicating sustained potential for growth.
Furthermore, Bitcoin’s MVRV Z-Score, another crucial valuation metric, remains significantly below levels historically associated with market tops. This score typically enters a “red zone” when market value vastly exceeds realized value, signaling overvaluation and often preceding major price reversals.
Popular analyst Stockmoney Lizards explained on X that high Z-scores (red zone) indicate massive profits and potential selling pressure, while low scores (green zone) suggest undervaluation and smart money accumulation. Historically, macro tops have coincided with MVRV Z-scores between 7 and 9, with the 2017 peak surging above 9 and the 2021 peak rising above 7 before a reversal.
Currently, the MVRV Z-Score is “sitting at around 2,” according to Stockmoney Lizards, which is far from the historical “danger zone.” This suggests that investors are not yet “massively overextended on profits,” implying that Bitcoin may have considerable “room to run” before reaching its ultimate cycle peak, potentially targeting around $260,000 based on bullish megaphone patterns.
While the MVRV death cross presents a cautionary signal reminiscent of past market tops, other robust onchain indicators suggest that Bitcoin’s current rally may not yet be exhausted. This divergence creates a complex outlook for the cryptocurrency, with analysts weighing the potential for a significant correction against the possibility of further price appreciation.
