Analysts at cryptocurrency exchange Bitfinex say two key indicators are suddenly turning bullish for Bitcoin (BTC).
In a new blog post, Bitfinex analysts say that Bitcoin’s market value to realized value (MVRV) ratio shows that the price of the top-performing crypto asset is likely to rise.
MVRV is the ratio of Bitcoin’s market capitalization to its realized capitalization, which is the value of all BTC at the price at which they were purchased and is used to assess whether the crypto asset is undervalued or overvalued. Analysts say the MVRV ratio suggests Bitcoin is now undervalued after falling since early April.
The second indicator that analysts believe signals an uptrend is Bitcoin’s weighted open interest (OI) funding rate, which has turned positive after multiple recent negative declines.
According to analysts.
“Currently, two significant Bitcoin on-chain metrics signal a potentially advantageous buying opportunity. Measuring market value versus realized value, along with the weighted open interest funding rate, suggests a potential entry point for investors…
Several on-chain metrics, including the MVRV metric and the OI Weighted Funding Rate, currently indicate a potentially attractive entry point for Bitcoin investors.
Funding rates represent trader sentiment in the perpetual swaps market and their amount is proportional to the number of contracts. Positive funding rates indicate that long traders are dominant and are willing to fund short traders.
Negative funding rates indicate that short traders dominate and are willing to pay long traders.
Bitcoin is trading at $59,207 at the time of writing, up almost 4% in the last 24 hours.
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