Crypto analyst Benjamin Cowen says there is one indicator that could signal the end of the Bitcoin (BTC) bull market in the future.
In a new strategy session, Cowen looks at the MVRV Z-score, which compares BTC’s market capitalization to the value of each coin the last time it was moved to determine whether Bitcoin is undervalued, overvalued, or at fair value.
Cowen notes that in the past, market cycle tops occurred when the MVRV Z-Score reached a certain range.
“Historically, the market cycle tops for Bitcoin corresponded to an MVRV Z-Score somewhere between seven and ten, around seven to ten.
In fact, the first cycle top, the MVRV Z-Score, came in at around 7.68. The latter peaked around 7:15 am.
And you see that the intermediate ones went even higher.
Again, right now the MVRV Z-Score high for this cycle is 3.29, but this is another metric that could certainly be useful in helping confirm whether a high corresponds to a top of the market cycle or whether that is true euphoric sentiment is present, or if we even think it is there.
That’s kind of the case in March 2024, it felt like the market was overheated, and it was, we got a mid-cycle top. But a look at this chart would have helped suggest that it was not, in fact, a market cycle top.
So I think this is another chart we can put in our toolkit to help us better navigate Bitcoin.”
At the time of writing, BTC is trading at $96,253.
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Generated image: Midjourney