Bitcoin [BTC] witnessed a significant turnaround following a gradual decline in the past week, pushing its value down to $94,000.
During the early hours of February 10th, BTC displayed signs of recovery, surpassing the $97,000 mark, marking a 2.3% increase compared to the previous day.
While this upward momentum is encouraging, a closer examination of the fundamental metrics of the network provides insights into the potential future trajectory of the primary cryptocurrency.
An in-depth study conducted by CryptoQuant revealed a notable movement within the Bitcoin network. On February 10th, around 14,000 Bitcoins that had been inactive for seven to ten years suddenly experienced movement.
Notably, these coins did not end up on exchanges, indicating that they were not intended for immediate conversion into cash.
The CryptoQuant analyst who shared this information noted:
“It is essential to recognize that these coins were acquired at relatively low prices, which could impact the decision-making of the holders concerning potential sales.”
Bitcoin’s Current MVRV Ratio and Its Significance
Furthermore, the MVRV ratio provided crucial insights into the state of Bitcoin’s market.
The MVRV (Market Value to Realized Value) ratio assesses Bitcoin’s market capitalization against its realized value, which is the total value of all coins based on the price at which they were last transacted on the blockchain.
This ratio acts as an indicator of whether the asset is undervalued or overvalued at its current price level.
Recent data from CryptoQuant also pointed out a decreasing trend in Bitcoin’s MVRV ratio, correlating with its recent price corrections.
On January 21st, the MVRV ratio stood at 2.52. However, following Bitcoin’s price decline, it decreased to 2.23 by February 9th.
Historically, a drop in the MVRV ratio has often indicated potential entry opportunities for long-term investors. Nevertheless, if this ratio continues to fall, it might imply persistent market fragility or investor hesitation.