Analysts with the crypto exchange Bitfinex say two key metrics are suddenly flashing bullish for Bitcoin (BTC).
In a new blog post, Bitfinex analysts say that Bitcoin’s Market Value to Realized Value (MVRV) ratio shows the price of the top-performing crypto asset is likely going up.
MVRV is the ratio of Bitcoin’s market capitalization relative to its realized capitalization, which is the value of all BTC at the price they were bought at and is used to assess whether the crypto asset is undervalued or overvalued. The analysts say the MVRV ratio suggests Bitcoin is now undervalued after falling since the start of April.
The second indicator the analysts say is signaling bullishness is Bitcoin’s Open Interest (OI) weighted funding rate, having turned positive after recent multiple negative dips.
Says the analysts.
“Currently, two important Bitcoin on-chain metrics signal a potentially advantageous buying opportunity. The Market Value to Realized Value measure, alongside the Open Interest weighted funding rate, hint at a potential entry point for investors…
Several on-chain metrics, including the MVRV measure and the OI weighted funding rate, are currently indicating a potentially attractive entry point for Bitcoin investors.”
Funding rates represent traders’ sentiment in the perpetual swaps market, and the amount is proportional to the number of contracts. Positive funding rates indicate that long position traders are dominant and are willing to pay funding to short traders.
Negative funding rates indicate that short position traders are dominant and are willing to pay long traders.
Bitcoin is trading for $59,207 at time of writing, up nearly 4% in the last 24 hours.
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