- From the high of $48,000 on ETF approval day, Bitcoin has retreated 16%.
- The MVRV ratio pointed to an early bull market.
Bitcoin [BTC] saw upward momentum on Tuesday, bringing the 24-hour gain to 2.79% at the time of writing, according to CoinMarketCap.
However, there have been few positives for King Coin since ETFs that track spot prices were approved for trading in the US on January 11.
From the high of $48,000 on ETF approval day, Bitcoin has retreated 16%.
A repeat of history?
According to AMBCrypto’s analysis of Glassnode’s NUPL data, the Bitcoin market witnessed a phase of fear after more than a month of confidence.
Source: Glassnode
However, according to the well-known on-chain researcher Ali Martinezthis was just history repeating itself.
He stated that Bitcoin went through several such phases where faith was followed by brief fear, during which significant price corrections were observed. Martinez predicted
“If history is any guide, this could be a temporary setback before the continuation of the upward trend.”
Relief? Not soon
However, the turnaround was not likely to happen immediately.
According to a separate analysisMartinez used the Fibonacci retracement levels to conclude that Bitcoin could fall to $32,000 before bouncing back.
The fundamentals on the chain still look promising
To understand things further, AMBCrypto took a closer look at CryptoQuant’s MVRV ratio.
When the MVRV rises above 3.7, Bitcoin is said to be overvalued, leading to market tops. When it is below 1, Bitcoin is said to be undervalued or has a bottom in the market.
At the time of writing, the indicator was at 1.76, indicating the early stages of a bull cycle.
Source: CryptoQuant
Furthermore, at the time of writing, approximately 77% of all Bitcoins in circulation were being held profitably, the highest since December 2021.
This was also above the 365-day moving average, indicating a shift in price trend towards bullish.
Source: CryptoQuant
Read Bitcoin’s [BTC] Price forecast 2023-24
These indications offered a significantly more positive picture for Bitcoin than the price charts.
Taking note of the developments in the crypto market, Shivam Thakral, CEO of Indian cryptocurrency exchange BuyUcoin, said:
“The crypto market continues to witness selling pressure as Bitcoin ETFs have made entry and exit into the investment vehicle very easy. The next market move could be the US Fed announcing a rate cut at the end of 2023.”