This On-Chain Indicator Reveals the Perfect Time to Sell Your Bitcoin: CryptoQuant
A new report from CryptoQuant suggests that it’s still too early for investors to consider selling their Bitcoin in the current crypto bull market.
The research quick take, published by the market intelligence firm, examines whether Bitcoin is approaching a “distribution zone” or market peak, or if current prices are still favorable for investors looking to buy.
According to authorized analyst Tarek On-Chain, there is one indicator that can accurately determine the best action for long-term investors in the current market. The MVRV (Market Value to Realized Value) indicator provides valuable insights into Bitcoin’s price tops and bottoms.
The MVRV indicator is a classic on-chain metric that measures the ratio between Bitcoin’s market cap and its “realized cap.” Market cap represents the total value of all circulating Bitcoin based on the current market price, while realized cap calculates the value of all coins based on the last time each coin moved on-chain.
MVRV is commonly used to gauge the profit potential for Bitcoin investors, assuming that the realized price of each coin reflects a specific buyer’s entry point. For example, a ratio of 2.0 indicates that the average coin has doubled in value since it was last purchased.
Historically, MVRV has remained above 1.0 for Bitcoin, except during the bear market of late 2022. Values below 2.0 generally indicate that Bitcoin is in an accumulation zone and is still undervalued.
On the other hand, bull cycle peaks often occur when the value exceeds 3.5, indicating that the network has achieved a 250% profit. As unrealized profits increase, long-term holders are more likely to start selling their Bitcoin.
Currently, Bitcoin’s MVRV score is 2.3, suggesting that the market is still far from its peak. Tarek predicts that the price will reach a new high in this cycle, potentially surpassing $100k. He advises investors to consider selling when the indicator approaches a value of 3.
In its latest weekly report, CryptoQuant reassures investors that the Mt. Gox bankruptcy will not create immediate selling pressure for Bitcoin. The movement of coins within the addresses of the Mt. Gox Rehabilitation Trustee is not yet available on the open market, as these transfers are part of preparations for creditor repayments.
Overall, CryptoQuant’s analysis indicates that it is not yet the time to sell Bitcoin, and investors can remain confident in the ongoing bull market.
