Bitcoin may be on the verge of a new rally due to possible reversals in two significant on-chain indicators. The recent decrease in sell-side risk ratio and potential bullish crossover in MVRV momentum are invigorating market optimism.
Bitcoin's Potential Rally
Bitcoin [BTC] may be preparing for a new rally as two significant on-chain indicators show signs of historical reversals. The recent decrease in the sell-side risk ratio and a potential bullish crossover in MVRV momentum are reviving market optimism.
Historical Rebound Zone
The Sell-Side Risk Ratio of Bitcoin has dropped to 0.086%, the lowest in months. In the past, when this metric fell below 0.1%, it indicated strong recovery zones, showing suppressed realized profits compared to market cap. Such low-risk periods typically align with investor reluctance to sell, reducing price pressure. The ratio is currently indicating a low risk of profit-taking, suggesting a potential reversal if buying momentum returns.
MVRV Momentum and Bitcoin Price
The MVRV ratio, which compares market value to realized value, is a tool often used to identify undervaluation zones. Bitcoin’s MVRV ratio has been below the 70-day average for weeks, reflecting pre-bullish setups seen in late October and January. At press time, Bitcoin was trading around $81,100, with 50-day and 200-day moving averages at $84,934 and $93,916, respectively. The failure to reclaim the 50-day MA is a short-term concern. However, the technical setup and on-chain metrics suggest sellers are exhausted and accumulation is gradually returning. If BTC reclaims $85K, it could trigger bullish momentum toward the $90K psychological barrier. Until then, the market may range, with the current setup favoring accumulation strategies.
Bitcoin is showing signals of a potential recovery, highlighted by positive dynamics in key on-chain indicators. This could trigger further accumulation and price increase impetus.
