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Bitcoin (BTC) Might Be Due for Parabolic Growth, Analyst Says

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Mon, 21/08/2023 - 15:45
Bitcoin (BTC) Might Be Due for Parabolic Growth, Analyst Says
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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.

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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.

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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.

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