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Bitcoin is gradually approaching $110,000 once more, recently hitting an intraday peak of $108,116 and now consistently trading above $107,000. Despite the pullback below $99,000 in the last week, Bitcoin’s present market behavior indicates that the broader market remains optimistic.
Significantly, the recent market movements within the last 24 hours are starting to alleviate concerns about whether Bitcoin has already hit its peak for this cycle. The MVRV Z-Score might be providing a clear indication, which points in a direction contrary to what some may assume.
MVRV Z-Score Indicates Bitcoin Has Potential to Rise
Per crypto analyst Doctor Profit, who initially shared an on-chain assessment of Bitcoin on the social platform X, the MVRV Z-Score suggests that BTC remains far from its cyclical peak. The MVRV Z-Score is a recognized on-chain metric utilized to ascertain whether Bitcoin is overpriced or underpriced.
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As highlighted by the analyst, the present level on the MVRV Z-Score metric is barely slightly above 2, which has been a relatively neutral territory since Bitcoin’s inception. Bitcoin only reached its significant highs in previous cycles when this metric ascended into the red zone and above values around 8 and higher.
The comprehensive Bitcoin price chart shared by Doctor Profit substantiates this assertion. The peaks in the orange MVRV Z-Score line are marked with red shaded regions in the chart below. These red areas have aligned almost precisely with Bitcoin’s price peaks in 2011, 2013, 2017, and 2021. Conversely, despite the recent climb to new all-time highs in May, the current cycle has yet to drive Bitcoin’s price into that excessively heated zone. Instead, the chart illustrates the Z-Score remaining in a significantly lower range. This suggests that the Bitcoin price may have considerable upward potential left.
MVRV vs Price: What The Current Situation Indicates For Bitcoin
One aspect that stands out in the current cycle is the trend of lower highs forming in the MVRV Z-Score, as observed in the chart. Unlike earlier cycles, where the metric surged into extreme overvaluation areas exceeding 10, the most recent peaks have been noticeably more muted. This trend might be interpreted as a sign that the market is starting to mature or that Bitcoin may even already be nearing the top of its current cycle.
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Nonetheless, although this trend is worth monitoring, it is far from definitive. The only conclusive element is that Bitcoin’s price has never reached a clear cycle peak until the MVRV Z-Score has surged into the red zone, which it has not yet done this time. While there isn’t a prescribed price peak from the metric, other analysts have suggested a broad spectrum of predictions for where it could settle. Forecasts of Bitcoin price peaks vary from $150,000 to as high as $500,000.
As of now, Bitcoin is being traded at $107,740, reflecting a 1.4% increase over the past 24 hours.
Featured image from Getty Images, chart from Tradingview.com
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