17 hours ago
1650
The Bitcoin price enjoyed a modest recovery on Friday, the start of May. Alongside its technically bullish structure, this auspicious beginning tells a story about Bitcoin’s chances of performing impressively in the coming weeks.
Yet, the flagship cryptocurrency still faces a broader threat of a potential downturn. According to data from a recent on-chain evaluation, if Bitcoin experiences another sell-off, it might not establish a local floor until it reaches as low as $43,000.
MVRV Points To Key Support Zone Below Current Levels
In a recent post on the social media platform X, crypto pundit Ali Martinez hypothesized that Bitcoin’s price might have yet to establish a local bottom. This postulation is based on BTC’s MVRV Pricing Bands, which use the ratio between market value and realized value to identify when Bitcoin is overvalued or undervalued.
According to the analyst, the MVRV Pricing Bands have been instrumental in establishing where the Bitcoin price bottoms are likely to be. Specifically, the crypto expert explained that Bitcoin has historically bottomed between the 1.0 and 0.8 bands — a pattern that has been playing out since 2010.
With the usual “bottoming zones” within the established price bands, Martinez further revealed that Bitcoin has yet to test these critical zones in its current cycle. Per the analyst, the bands have established the following price positions: 1.0 MVRV Band at $54,145; 0.8 MVRV Band at $43,316.
Hence, the crypto pundit noted that these bands could contain Bitcoin’s price in the event of a macro sell-off (causing a deep retracement). As is also evident in the chart shared by Martinez, cycles that fail to revisit key accumulation zones typically remain vulnerable to deeper pullbacks before establishing a long-term base.
Bitcoin Price Takes On 2022 Bottoming Structure
In a separate post on the X platform, Ali Martinez revealed that the Bitcoin price is currently forming a structure similar to that seen in 2022. In the case where Bitcoin follows the 2022 structure, Martinez pointed out that the market could still give one more push higher.
However, this bullish trajectory might not be sustainable in the near-term, as it would likely be followed by a “final leg down.” If this holds, the MVRV pricing bands previously established would likely also come into play to cushion Bitcoin’s fall.
At the time of writing, the Bitcoin price stands at approximately $77,933, reflecting a 2% daily gain.
English (US)