The cryptocurrency market is feeling the heat after the announcement of a 25% tariff on the European Union by U.S. President Donald Trump, leading to increased uncertainty in global financial markets.
This latest development adds to the existing instability in digital assets, raising concerns about economic unpredictability.
Optimistic View on BTC by Crypto Analyst
Despite the volatility, not all analysts are bearish about the future. The CEO of Assure DeFi and crypto analyst Chapo remains positive about Bitcoin [BTC], stating that there is still potential for growth in this cycle amidst the ongoing market fluctuations.
Using Bitcoin’s Market-Value-to-Realized-Value (MVRV) ratio as an essential metric for valuation assessment, analyst Chapo shared insights on X (formerly Twitter), mentioning,
“I anticipate a peak MVRV ratio of around 3.2 during this cycle, indicating another positive year in 2025 before we hit the cycle’s peak.”
For context, Bitcoin last reached this MVRV level in April 2021, when its price soared to $58,253, marking a 101% increase from $28,994.
Chapo also remarked,
“We’re not quite there yet.”
Decoding the MVRV Ratio’s Message
Currently, Bitcoin’s MVRV ratio sits at 1.95, evaluating whether the asset is overvalued or undervalued by comparing its market capitalization to realized capitalization, as per Bitbo.
However, analyst Chapo pointed out that the current MVRV ratio is at 2.09, indicating that on average, BTC holders have more than doubled their initial investment.
He also highlighted that historically, MVRV tends to spike significantly as Bitcoin nears its peak in a cycle, hinting at a strong bullish market phase.
He stated,
“Historical patterns indicate that MVRV spikes sharply at market tops, reaching a point where profit-taking surpasses new buying interest, presenting unfavorable risk/reward conditions for new investors.”
Aligning with Chapo’s views, CryptoQuant’s Head of Research Julio Moreno shared a similar perspective.
Future Prospects
At the time of writing, BTC was valued at $86,113.30, experiencing a 3.47% decrease in the last 24 hours, according to CoinMarketCap.
Following Trump’s tariff announcement on Canada and Mexico, the cryptocurrency dropped to $88,000, emphasizing the complex market dynamics in play.
While there are indications of a possible market bottom from the Global Bid & Ask ratio’s movement, investor sentiment remains mixed.
Short-term holders reacted by selling in panic, while long-term investors exhibited resilience.
With ongoing volatility, the market eagerly awaits additional signals to determine whether Bitcoin has established a solid support level or if further corrections lie in store.