Bitcoin Nearing Signal That Anticipated 270% Rally: Analysts

A well-known data analysis company has indicated that Bitcoin (BTC) is on the verge of displaying a signal that has previously marked the beginning of a significant surge for the leading cryptocurrency.

Santiment has revealed on the social media platform X that it is closely monitoring Bitcoin’s 30-day and 365-day Market Value to Realized Value (MVRV).

The MVRV represents the ratio of a cryptocurrency’s market capitalization in relation to its realized capitalization or the value of all coins at the price they were acquired. When the MVRV falls below zero, it suggests that the asset is oversold, indicating that traders who purchased it within a specific timeframe are experiencing losses.

As per Santiment’s analysis, individuals who acquired BTC 30 days ago are currently at a loss, while those who bought BTC 365 days ago are nearing negative territory. The analytics firm points out that the last instance when Bitcoin’s 30-day and 365-day MVRV turned red was in March 2023, just before BTC embarked on a robust uptrend from $20,000 to $74,000.

“One of the primary signals that Santiment values in the entire crypto space is when both Bitcoin’s 30-day and 365-day MVRV are in negative territory. This signifies a mathematical confirmation that you are purchasing in comparison to the pain experienced by other traders. If you had invested the last time both of these metrics were negative, your Bitcoin return would currently stand at +132%.”

Furthermore, the analytics firm highlights that the number of non-empty Bitcoin wallets has decreased by 566,000 since June 15th, indicating that hundreds of thousands of holders have divested their BTC due to fear of incurring losses.

“Patient bulls should find encouragement in this trend, as the liquidation of wallets by impatient non-believers signals bottoms driven by FUD (fear, uncertainty, and doubt), similar to what was observed in January [2024].”

Lastly, Santiment underscores that the sentiment of the crowd towards BTC is at a one-year low, heightening the likelihood of a rebound.

“Bitcoin sentiment among traders on X, Reddit, Telegram, 4Chan, and BitcoinTalk is currently reflecting the most pessimistic narratives seen in a year. When the crowd exhibits FUD at this level, the chances of a rebound catching the majority off guard are at their peak.”

At the time of writing, Bitcoin is valued at $57,881.