Bitcoin's MVRV Ratio Resets to Long-Term Mean: What This Means for Investors

Bitcoin's MVRV Ratio Resets to Long-Term Mean: What This Means for Investors

Bitcoin’s MVRV Ratio has dropped to its long-term mean of 1.74, signaling a cooling of unrealized gains and a potential consolidation phase. This reset, similar to the August 2024 unwind, suggests a period of market stabilization. The Bitcoin percentage supply in profit has rebounded from its long-term mean, indicating a reset in investor expectations without widespread panic selling. Currently, 88% of the Bitcoin supply remains in profit, with losses concentrated among recent buyers in the $95,000–$100,000 range.

The BTC Realized Profit/Loss Ratio has also moved back above 1.0, signaling a shift toward profit-taking. This rebound reflects improving market sentiment, with strong demand absorbing profit realization, supporting the case for recovery.

Bitcoin Price Action and Market Sentiment

At press time, Bitcoin was trading down 1.3% over the last 24 hours, priced at $94,310. The crypto market experienced selling pressure, with only a few assets in the green as investors focused on the Federal Reserve meeting and interest rate decision. Markets anticipate the Fed will keep rates unchanged, with over 98% probability according to CME Group’s FedWatch tool. However, investors will closely watch the Fed’s policy statement and press conference for clues on future rate changes.

Institutional Investment in Bitcoin

In a positive sign for Bitcoin, Strategy purchased an additional 1,895 BTC worth nearly $180 million last week. This brings their total holdings to 555,450 BTC, valued at $52.35 billion, with an unrealized profit of $14.28 billion. This significant investment underscores institutional confidence in Bitcoin’s long-term potential.

Overall, while Bitcoin faces short-term volatility, key indicators suggest a resetting market with strong underlying demand, positioning Bitcoin for potential recovery and growth.