The data analysis company Glassnode has unveiled the target Bitcoin must hit to reach the historical high zone in the current pricing model.
Bitcoin Yet to Surpass Previous MVRV Pricing Band
In a recent post on X, Glassnode discussed the extreme euphoria threshold of the Bitcoin Market Value to Realized Value (MVRV) Pricing Bands. This pricing model is based on the MVRV Ratio.
The “MVRV Ratio” is a well-known on-chain indicator that compares the market cap (investor value held) to the realized cap (initial investment value). A value greater than 1 indicates investor profit, while a value lower than 1 suggests market losses.
Historically, excessive investor profits in Bitcoin have signaled overheated conditions, potentially leading to mass sell-offs. Conversely, market losses have tended to signify market bottoms due to the lack of sellers.
The MVRV Pricing Bands aim to capture this relationship by defining specific price levels for Bitcoin corresponding to key MVRV Ratio levels.
Below is the chart showing the trend in Bitcoin pricing bands over recent years shared by Glassnode:
Currently, Bitcoin is trading above the 0.8 pricing band, where bear market bottoms have historically formed. The coin is priced at $33,100, well above this level, and significantly below the 1.0 level at $41,300.
Bitcoin is currently trading under the 2.4 and 3.2 levels at $99,300 and $132,400, respectively. Historically, the 2.4 level has indicated an overheating bull market.
If Bitcoin’s market cap surpasses the 3.2 level, a potential market top is expected.
The chart below demonstrates the rarity of Bitcoin trading above the 3.2 level:
According to Glassnode, “BTC price has historically spent only ~5% of trading days above the 3.2 MVRV level,” indicating extreme euphoria. As of now, Bitcoin has not surpassed this level in the current cycle.
At the time of writing, Bitcoin is priced around $93,400, marking a decrease of over 3% in the past week.
