Leading crypto Bitcoin (BTC) continues to stay below $20,000. “The MVRV-Z Score is a tried and tested bottom indicator, but it has not yet returned to the bottom,” one analyst warns.
MVRV-Z Score marks macro bottom
One of the most accurate indicators in the market shows that Bitcoin (BTC) must fall further before it sets a macro bottom. Data from sources including on-chain analytics firm Glassnode, as well as Bitcoin’s MVRV-Z Score, show nearly a price reversal.
Debate continues as to whether or when BTC will break above the current macro low of $17,600. In the midst of this, the new numbers show that it is possible for the market to easily fall further. As Filbfilb, co-founder of trade platform Decentrader, points out, the MVRV-Z score is now in the classic green zone. However, it is not yet at the point that accompanied price dips in the past.
MVRV-Z measures how high or low the Bitcoin spot price is relative to what’s called its “fair value.” The metric has become one of the most efficient Bitcoin top and bottom forecasting tools. MVRV-Z uses market cap and actual price data along with the standard deviation to calculate the score.
Datasource LookIntoBitcoin states that MVRV-Z has captured every macro in BTC at the top and bottom in its history. Plus, he says he did it with an accuracy of two weeks. The metric has fallen below its green zone only a few times, most recently in March 2020. But more downward pressure will provide a repetitive performance.
Evaluating the MVRV-Z score, Filbfilb commented on the latest data:
This chart is number one for me.
Bitcoin MVRV-Z Scoreboard / Source: GlassnodeThe $16,000 bottom zone for Bitcoin gains traction
$15,600 will be linked to various current predictions of where Bitcoin is at the bottom. Meanwhile, over the weekend, analyst CryptoBullet shared an update to his Twitter followers. The popular account has included this area as one of the few key support zones to watch. $16,000 also marks the average deviation from Bitcoin’s 50-month moving average.
Meanwhile, Bitcoin’s relative strength index, or RSI, is at its lowest level ever. This is another indication of the oversold nature of a market. It is currently sitting below the high of around $20,000 from the previous halving cycle. As you follow on Kriptokoin.com, many analysts are pronouncing lower levels for crypto.
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