Bitcoin still above undervalued zone; Is 2023 the best time to accumulate BTC?
The cryptocurrency market is still recovering from the losses incurred after the government launched an intensified crackdown on cryptocurrencies. Some indicators suggest that this is the ideal time to use the bear market and accumulate Bitcoin (BTC).
As it happens, Bitcoin’s Market Value to Realized Value (MVRV) broke out of the undervaluation zone on January 19 and currently stands at 1.12. In the past, a strong breakout was never followed by a fallback below 1.0, as observed by Dan Lim, analyst at CryptoQuant, on February 15.
However, the cryptoanalyst noted that this time the rules seem to be a little different and that right now, “as a bear market accompanied by macro issues is underway, it seems better to take a more conservative and long-term split buy approach.”
Carpe horsam
Furthermore, as Lim continued, it is necessary to look ahead, as this may be a good time to accumulate the flagship decentralized finance (DeFi) before the price increase:
“As we look at 2022 and 2023 in the next bull market, this period is likely to be a very good accumulation period. However, it is unfortunate that so many people buy most in the late stages of a bull market.”
What is MVRV?
Specifically, the MVRV ratio can be used to identify whether an asset’s price is reasonable or not by comparing the price to its fair value. As a stand-alone statistic, MVRV has been an effective sign in determining the top and bottom of the crypto market.
As a rule of thumb, the lower the MVRV ratio, the greater the probability that the observed asset price will increase in the future, as this important indicator measures the average profit or loss of the addresses that had previously invested in the asset.
Bitcoin price analysis
Meanwhile, Bitcoin has started to recover from the week-long losses that saw its price fall by 5.02% and is now trading at $22,126, representing a modest gain of 1.99% on the day, as the asset also registers 6.1% . increase during the month.
It’s also important to note that several analysts have predicted that Bitcoin’s next halving event, scheduled for 2024, will dramatically “push” the price of the first digital asset, including Bloomberg’s senior commodities expert Mike McGlone who believes Bitcoin could reach $100,000 around that time.
More recently, Robert Kiyosaki, author of the best-selling personal finance book ‘Rich Dad Poor Dad’ has projected that Bitcoin will trade at $500,000 by 2025, as “the belief in [the] US dollar, fake money” is destroyed and gold, silver and Bitcoin emerge as the alternatives.
According for crypto trading expert and analyst Michaël van de Poppe, Bitcoin could “make a new low”, but the upside was significantly greater than the downside, given that “the price has reached the bottom of $15.5K and rose to $22.1K (…) after Luna , Celsius, Voyager, FTX, 3AC, BlockFi, DCG and Gemini.”
Meanwhile, Bitcoin has also shown signs of renewed hope in the system, as the Fear and Greed Index is stuck at greed levels, and unrealized gains have outpaced losses in recent weeks, as Finbold reported on February 14.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
