Key Points
- Bitcoin has seen a significant rebound in its price, marking a 10.38% hike on the monthly charts.
- Analysts predict a sustained long-term rally based on the MVRV metric and other fundamentals.
Over the past month, Bitcoin (BTC) has shown a notable recovery in its value after two months of intense fluctuations.
After reaching a peak of $70,016 in July, BTC underwent a substantial decrease, even dropping to a low of $49k.
However, following the Federal Reserve’s rate cuts a week ago, BTC has seen significant gains. At the time of writing, Bitcoin was trading at $65,839. This represents a 10.38% increase on the monthly charts, accompanied by a further 4.47% increase in 24 hours.
Predictions for a Continued Rally
The recent surge has sparked discussion within the crypto community. Cryptoquant analyst Burak Kesmeci has suggested a possible sustained long-term rally, based on the MVRV metric.
According to Kesmeci, the Bitcoin MVRV Metric is currently indicating a bullish trend, with the MVRV pricing above its SMA 365. After examining the historical relationship between the MVRV and the 365-day moving average, Kesmeci concluded that BTC typically experiences a rally after the MVRV exceeds SMA365.
At the moment, the MVRV is at 2.04, above its SMA 365 at 2.02. This is interpreted as a strong bullish signal, suggesting that bulls currently dominate the market.
What the Fundamentals Indicate
While Kesmeci’s highlighted metric offers a positive outlook, other fundamentals also provide insight.
Bitcoin’s Exchange Supply ratio has steadily decreased over the past week. This decline indicates investors’ holding behavior as they keep their assets in cold wallets rather than on exchanges. This is a bullish signal, implying investors’ confidence in future values as long-term holders anticipate the crypto’s price to rise.
In addition, Bitcoin’s fund flow ratio has been increasing over the past week, indicating greater funds inflows into BTC. This reflects growing confidence among investors, who are more likely to buy BTC in anticipation of future gains.
Lastly, Bitcoin’s Short-term holder SOPR has also been rising over the past week, showing that the market is strong. This indicates that the uptrend is likely to continue.
In summary, BTC is experiencing a positive market sentiment and increasing investor favourability. If these market conditions persist, BTC will attempt to breach the $68,240 resistance level.
