The leading cryptocurrency Bitcoin (BTC) has caused great fear in the market due to the sharp, sudden declines and high volatility it has experienced in recent days.
While investors fear that Bitcoin’s decline will continue, a CryptoQuant analyst said that on-chain indicators on BTC are strong.
Accordingly, CryptoQuant analyst with the pseudonym XVIN Research said that on-chain data does not indicate a market crash, but merely a transition period.
The analyst noted that approximately $1.7 billion worth of positions, mostly long positions, were liquidated in the last 24 hours, but exchange balances continued their steady decline.
The analyst explained that the decline in exchange balances indicates a shift to self-storage rather than selling, a pattern consistent with market stabilization phases seen in the past.
“Over $1.7 billion in positions were liquidated in the past day, mostly from over-leveraged long positions. Long-term investors (LTHs) continue to book profits, while short-term investors face forced liquidations.
However, exchange reserves continue to trend downward, suggesting that coins are being withdrawn for self-storage rather than sold, a behavior that historically coincides with phases of stability.
Bottom Signal in Bitcoin!
The analyst also said that Bitcoin’s Market Capitalization/Realized Value (MVRV) ratio is currently at 1.8, its lowest level since April.
Stating that MVRV points to a potential accumulation zone, the analyst said that this ratio gives an important signal.
Historically, a decline in the MVRV ratio to the 1.8 to 2.0 range generally signals a medium-term market bottom or an early recovery phase.
Bitcoin’s MVRV Ratio is signaling a possible bottom formation amid fear and liquidations.
Historically, when MVRV falls into the 1.8-2.0 range, this typically coincides with medium-term market bottoms or early recovery phases.
“…Overall, on-chain signals point to a market in transition, not in decline.”
The analyst finally noted that with large-scale profit-taking nearly complete and stablecoin supply remaining high, the overall on-chain picture points to a transition period, not a market crash.
*This is not investment advice.