Bitcoin’s Market Value to Realized Value (MVRV) ratio is sending a bullish signal, with analysts suggesting a potential price rebound may be imminent.

MVRV ratio indicates local bottom

CryptoQuant analyst ShayanMarkets reported that Bitcoin’s MVRV ratio has fallen below its 365-day moving average, a level that has historically marked local bottoms and buying opportunities. The analyst stated:

“Historically, each time the ratio dropped below the 365 SMA, it has marked a buying opportunity and a local bottom signal.”

Previous instances of this pattern—in mid-2021, June 2022, and early 2024—preceded significant rallies of 135%, 100%, and 196% in Bitcoin’s price.

ShayanMarkets explained that this trend suggests the market is entering an undervalued phase, typically when long-term holders begin accumulating.

For further context, see the bitcoin mvrv chart and the bitcoin mvrv z score chart.

Recent price movements and market confidence

Following an 18% drop in BTC price to around $103,530 from its all-time high of $126,000, the MVRV ratio declined, reflecting decreased speculative excess and growing long-term confidence.

ShayanMarkets added:

“If this metric begins to turn upward from current levels, it could confirm that the recent sell-off was a cyclical bottom formation, supporting a renewed bullish phase into Q4.”

Capital rotation from gold to bitcoin

Michaël van de Poppe, founder of MN Trading Capital, noted a sharp 8.5% drop in gold from its all-time high, suggesting capital may shift from gold to bitcoin.

Bitwise analysts estimate that a 5% capital rotation from gold to bitcoin could push BTC as high as $242,000.

Upcoming economic data

The upcoming U.S. Consumer Price Index (CPI) report could influence market sentiment.

Van de Poppe commented that a softer CPI print may encourage rate cuts and end the government shutdown, potentially boosting bitcoin as risk appetite returns.