Crypto Analyst Says Bitcoin Will Rise To $79,600 If This Holds
An analyst has explained how Bitcoin will likely rise to test the $79,600 level if BTC can hold above this important level of a pricing model.
Next Bitcoin MVRV Pricing Band Is Currently Valued At $79,600
In a new post on X, analyst Ali Martinez has talked about where BTCs next destination could be based on an on-chain pricing model. The model uses the popular Market Value to Realized Value (MVRV) indicator.
This metric tells us how the value that the Bitcoin investors hold right now (that is, the market cap) compares against what they put in (the realized cap).
When the value of this indicator is greater than 1, it means that the holders as a whole are carrying a value higher than their initial investment; that is, they are in net profits. On the other hand, the MVRV being less than this threshold implies that the overall market is underwater at the moment.
There are a couple of pricing models based on this metric, but in the context of the current discussion, the MVRV extreme deviation pricing bands are of interest.
This models standard deviations around the MVRV mean signify the relevant price levels. Below is a chart that shows how these levels currently look for Bitcoin.
As the graph shows, Bitcoin is currently trading above the +0.5 pricing band. At the price level corresponding to this 0.5 level ($66,800 right now), BTCs MVRV value becomes 0.5 standard deviations above its mean value.
According to this model, the next level of interest is the +1, where the MVRV is 1 standard deviation over its mean. The price level at which the MVRV ratio would satisfy this condition is $79,600.
Historically, tops in the cryptocurrency have tended to form when the price breaches past this MVRV pricing band level. From the chart, its visible that BTC surpassed this level earlier in the year when it set its new all-time high, which continues to be the peak of the rally so far.
Ali suggests that if Bitcoin can continue to hold above $66,800 (the +0.5 pricing band level), the asset will likely rise to test the 1.0 pricing band at $79,600. A potential rally to this level would imply an increase of more than 14% for BTC from its current price.
Why do tops tend to be more probable to happen above the +1 MVRV pricing band? The reason could lie in the fact that when the MVRV attains values this high, the investors are holding considerable profits, so they are more likely to participate in a mass selloff.
BTC Price
Bitcoin witnessed a retest of the +0.5 pricing band earlier, but the level has continued to hold so far, as the coin has rebounded to $69,500 since then.
Read more: https://www.newsbtc.com/bitcoin-news/crypto-analyst-bitcoin-79600-if-this-holds/
Text source: NewsBTC
