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After another failed attempt at breaking the $74,000 resistance, the Bitcoin price continues to hover around the psychological $70,000 level, with very little — if any — momentum to boast of. Some analysts expect this price level to serve as a rebound point for the flagship cryptocurrency; however, data from a recent on-chain evaluation implies that the Bitcoin market might still see a final shake-off before the real move begins.
Historic MVRV Z-Score Comes In Sight — What This Means For Price
In a March 14 post on X, popular market analyst Ali Martinez put forward an interesting on-chain outlook on the Bitcoin price, showing the flagship cryptocurrency might soon establish a local price bottom. This hypothesis is based on readings obtained from the Bitcoin MVRV Z-Score metric.
For context, the MVRV Z-Score metric measures whether Bitcoin is either undervalued or overvalued by comparing its market value to its realized value. When the MVRV Z-Score enters negative territory, it indicates that the Bitcoin price has become significantly lower than the average cost basis of holders.
According to Martinez, there have been historical occurrences where the Bitcoin Z-Score reached a -0.262 reading, followed by a decisive rebound of the BTC price. As shown in the chart below, these occurrences were during the 2015, 2019, and 2022 cycle lows — all of which preceded the start of sustained bullish trends.
If historical patterns continue to hold — as it has thrice held — the recent approach of the -0.262 level could be a sign that Bitcoin might soon reach a level where active accumulation becomes the trend. However, it is worth noting that the Z-Score is still somewhat far from the pivotal level, as it currently stands near 0.469.
For this reason, it is reasonable to expect prices to head further south before reaching the expected Z-Score level. In a scenario where this Z-Score is reached, it is also important to note that an immediate trend reversal is not promised.
This is because, in the past cycles (per MVRV data), the Bitcoin price spent weeks — sometimes, months — establishing solid grounds, before finally making its major move. Hence, the scenario might occur similarly if the Z-Score falls to that level.
Bitcoin Market At A Glance
As of this writing, BTC is valued at around $71,480, reflecting an over 1% price increase in the past 24 hours. According to data from CoinGecko, the price of Bitcoin is up by more than 6% on the weekly timeframe.
