An often-used measure of value in technical analysis and a more recent valuation metric specific to on-chain analysis are at odds at the moment. Each is relevant, depending on how fast an investor is looking to generate gains.
MVRV readings above 3.7 indicate that an asset is overvalued, while readings below 1 indicate that an asset is undervalued. Despite the neutral reading, a look at historical pricing when BTC’s RSI trades at or around 48 shows a hint of promise. In over 120 occurrences since 2015, following a reading between 47 and 49,BTC has increased on average 6% after 90 days and 2% after seven days.
The narrow trading range implies a lack of conviction among traders. The reversion to the 20-day average suggests that BTC is trading relatively close to where it should be.MVRV holds primary relevance for investors, who tend to look longer term for payoffs. RSI and Bollinger Bands are most relevant for traders, who seek to accumulate gains more quickly.
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