Bitcoin MVRV Triple Ribbon Shows Bearish Signal Formation
As pointed out by an analyst in a CryptoQuant , the latest trend in the BTC MVRV triple ribbon may suggest the crypto will observe another local drawdown soon. Before looking at what “MVRV” is, it’s best to first take a look at the two major types of capitalization methods for Bitcoin.Where the other capitalization model, the “realized cap” differs is that instead of all the coins being weighted against the latest value of the crypto, each coin is multiplied by the BTC price that was there at the time of the coin’s last movement.
Now, MVRV is just the ratio between these two Bitcoin caps (market divided by realized). Historically, this metric has indicated when the value of BTC has been undervalued, and when it has been overvalued.
Looks like the 10-day MA curve is passing under the 15-day MA line | Source:These three moving averages of the indicator together form the “MVRV triple ribbon.” And as you can see in the above graph, the trend in this triple ribbon has had some interesting implications on the Bitcoin price during the last few months.
BTC Price
At the time of writing, Bitcoin’s price floats around $21.2k, down 12% in the past week. Over the last month, the crypto has lost 9% in value.
The below chart shows the trend in the price of the coin over the past five days.The value of the crypto seems to have plunged down a few days back | Source:
Featured image from Thomas Bonometti on Unsplash.com, charts from TradingView.com, CryptoQuant.com