U.Today – In early trading on Sunday, , and the rest of the cryptocurrency market saw profit taking, with around $252 million in cryptocurrency liquidations reported.
Bitcoin therefore fell to a low of $101,221 before recovering to an intraday high of $103,292. However, at the time of writing, it has pared some of its gains but is still up 1.6% over the past 24 hours to $102,796.
Ethereum price fell to a low of $3,831 at the start of Sunday's session, extending its decline from Saturday's trading. This decline was met with buying, and Ethereum rebounded to intraday highs of $3,906.
Ethereum has been aiming to reach $4,000 over the past four days, with bulls' attempt stalling just above $3,900.
On the other hand, Bitcoin frequently tests resistance above $100,000, increasing the possibility of a breakout. While the market remains bullish on both crypto assets, MVRV, an essential indicator for predicting market tops and identifying bottoms, indicates what might happen next for BTC and ETH.
What the MVRV indicator suggests
In a recent analysis, on-chain analytics platform IntoTheBlock explores the MVRV index in relation to major cryptocurrencies, including Bitcoin and Ethereum.
The market cap to realized value (MVRV) ratio is an important measure of timing cryptocurrency market cycles and identifying potential peaks. This ratio shows whether the price is higher or lower than what investors paid on average, indicating overvalued or undervalued conditions.
According to IntoTheBlock, historically, Bitcoin reaches a market bottom when the MVRV ratio falls below 1 and peaks when it exceeds 3. Each cycle has shown a decline in the peak MVRV, suggesting that future peaks may occur at lower ratios.
Bitcoin's MVRV is 2.5, which indicates that the market is warming but is still far from reaching its peak.
However, Ethereum's MVRV paints a complicated picture due to strong early increases that quickly led to initial buyers taking profit. Historically, Ethereum's bear market MVRV has been around 0.7, with a peak of 2.7 in the last cycle. Its current market cap ratio of 1.76 suggests that it has room to rise further before it reaches maximum valuation levels.
