Edris
MVRV study: Bear market bottom and "Digital Gold" narrative
✔️ The MVRV ratio is a useful macro indicator which is calculated by dividing the Bitcoin market cap by the realized cap. This metric can be used to determine the bull market tops and the bear market bottoms with decent precision. ✔️ It is evident on the chart that previous bear market bottoms have occurred while the MVRV ratio had values below one. These often-lengthy periods are when the smart money and intelligent investors tend to accumulate Bitcoin, creating sufficient demand to form a price bottom. The MVRV ratio currently sits around 1.3, pointing to the fact that the price could still experience more decline before a cyclical bottom forms. ✔️ Another interesting observation is the diminishing returns and losses over the last decade, which points to Bitcoin’s decreasing volatility on the road to become the “digital gold”, as it tries to transition from a highly volatile risk asset into a more stable, deflationary safe haven.