MVRV Z-Score, a sophisticated Bitcoin (BTC) valuation indicator, is getting closer to a zone that historically opened amazing opportunities for Bitcoin (BTC) bulls. In 2019 and 2015, touching these levels resulted in "parabolic" rallies, a seasoned cryptocurrency analyst says.
Bitcoin (BTC): This indicator hints at "parabolic" performance
Pseudonymous trader and analyst who goes by Coiner-Yadox (@Yodaskk in Twitter) is certain that Bitcoin (BTC) might be close to its "last buying opportunity" before a parabolic growth phase. They reached such a conclusion based on the MVRV Z-Score indicator that tracks the correlation between the market valuation of Bitcoin (BTC), its realized valuation (the price of each Bitcoin (BTC) when it was last moved between two on-chain wallets) and a standard deviation test.
As displayed by @Yodaskk, Z-Score indicators below 0.1 would be considered extremely low. Once the chart leaves the zone and touches it again, Bitcoin (BTC) becomes too undervalued, which hints at "parabolic" growth incoming.
To prove this thesis, he demonstrated similar patterns that happened two years before the 2017 and 2021 bullish rallies. The short "dip" of the MVRV Z-Score means the final phase of a bearish recession.
His audience shares this opinion. Typically, below $24,000 is considered to be a "no-brainer" buy zone in the ongoing period of a market cycle. However, traders should be ready for panic-driven drops to the "low-20s."
As covered by U.Today previously, on Aug. 16, 2023, Bitcoin (BTC) erased all of its gains of the last nine weeks. In almost no time, the digital gold collapsed below $25,400.
Historically, "pre-halving" years are well-known for events of such types, analysts say.
88.3% of short-term Bitcoin (BTC) holders underwater
However, the Q3, 2023, market is particularly merciless to Bitcoin (BTC) traders of various categories. Per the analysis of leading on-chain data tracker Glassnode, short-term holders have been the worst sufferers of the ongoing collapse.
While long-term holders of Bitcoin (BTC) are aggressively increasing the number of coins in their wallets, "paper hands" are suffering. Almost 9 out of 10 short-term holders are in loss, Glassnode data says. As such, 2.26 million BTC is now held at an unrealized loss.
By printing time, the Bitcoin (BTC) price stabilized over $26,100, up 0.11% in the last 24 hours. Alternative's Crypto Fear and Greed Index has dropped to its lowest levels since March 2023.