According to the latest data, the MVRV Z-score currently stands at 1.87, which means that there is still some room for a further rally.
This indicator compares the market value to the realized value. The realized cap calculates the last price at which each coin was moved on the network. When the market value is substantially higher than the realized value, it might indicate that Bitcoin is nearing the top of its current cycle. Notably, virtually all of the previous market tops had an MVRV Z-score above 6. For instance, it peaked at 10.4 back in December 2017.
It is worth noting that the score actually topped out at 3.66 in October 2021, when the flagship cryptocurrency peaked just above the $69,000 level. However, it peaked above 7 in February 2021. goes below zero, it means that there could be a relatively attractive buying opportunity. For instance, it bottomed out at -0.36 in November 2022.
While not infallible, this indicator has been historically useful for identifying when the largest cryptocurrency was approaching cyclical lows and cyclical highs. However, this sentiment might be premature since Bitcoin is still in the middle of a broader bearish trend, according to the Ichimoku Cloud indicator.
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