Bitcoin’s Comeback on the Horizon: Examining Key Market Indicators

Key Points

• Bitcoin’s Sell-Side Risk Ratio has dropped to 0.086%, a level that often precedes significant rebounds.
• The 70-day MVRV momentum of Bitcoin is nearing a bullish crossover, indicating potential undervaluation.

Bitcoin’s Potential Rally

Bitcoin [BTC] may be preparing for a new rally, as two significant on-chain indicators show signs of historical reversals. The recent decrease in the sell-side risk ratio and a potential bullish crossover in MVRV momentum are reviving market optimism.

Historical Rebound Zone

The Sell-Side Risk Ratio of Bitcoin has dropped to 0.086%, the lowest in months. In the past, when this metric fell below 0.1%, it indicated strong recovery zones, showing suppressed realized profits compared to market cap. Such low-risk periods typically align with investor reluctance to sell, reducing price pressure.

The ratio is currently indicating a low risk of profit-taking, suggesting a potential reversal if buying momentum returns. The 70-day MVRV momentum is nearing a bullish crossover above its moving average, a trend that has historically confirmed bottom formations.

MVRV Momentum and Bitcoin Price

The MVRV ratio, which compares market value to realized value, is a tool often used to identify undervaluation zones. Bitcoin’s MVRV ratio has been below the 70-day average for weeks, reflecting pre-bullish setups seen in late October and January.

At press time, Bitcoin was trading around $81,100, with 50-day and 200-day moving averages at $84,934 and $93,916, respectively. The failure to reclaim the 50-day MA is a short-term concern. However, the technical setup and on-chain metrics suggest sellers are exhausted and accumulation is gradually returning.

If BTC reclaims $85K, it could trigger bullish momentum toward the $90K psychological barrier. Until then, the market may range, with the current setup favoring accumulation strategies.