Bitcoin, after a brief stint at $23,000, has slipped back to $22,000. Traders are hopeful that the macroeconomic conditions will improve. But no event has offset the recent narrative of falling inflation and slowing economic growth.
The Market Value to Realized Value (MVRV), which is used to determine the average profit or loss of investors that purchased an asset over the past month, suggests that many cryptocurrencies are overextended. The unrealized profit is proportional to the magnitude of the rally. The 30-day MVRV for Bitcoin has spiked to 27%, showing the average profit of all addresses that purchased Bitcoin in the past month.
Bitcoin was recently trading at $22,649, down 1.93% in the past 24 hours. Matt Weller, the global head of research for FOREX.com, said the recent rally emerged from market dynamics. This includes the liquidation of a large short position. Weller highlighted that he sees a small element of that FOMO from traders who thought they would have all this year to buy near the lows. He said with prices picking up, many traders are throwing in the towel to make sure that they don’t miss the big surge off the bottom that they are now seeing.
Michael van de Poppe, the crypto analyst, said Bitcoin couldn’t break through a crucial resistance at $23,100. He outlined that if the market continues to make LHs, Bitcoin may test and sweep around $22,300 before continuation. This means serious buying opportunities. Daan Crypto Trades pointed out choppy price action without a clear pattern or direction.