According to CryptoQuant, the cryptocurrency market is currently in an oversold state after experiencing a significant correction. During this period, Bitcoin holdings for less than one month showed a notable surge, reaching 23% in March and 24.5% in December 2024. This uptick occurred alongside a substantial market correction, which drove Bitcoin’s Market Value to Realized Value (MVRV) ratio to 1.8, a figure dangerously close to the low of 1.71 recorded during the 2024 crash.
Rebound Opportunity
Experts believe that if Bitcoin’s value were to decline further into the $70,000 range, the MVRV ratio could approach levels observed at the lowest point of the previous correction. However, the prevailing weakened market sentiment has led altcoins to give back much of their recent gains, resulting in a situation where the majority of investors find themselves without profits in this cycle.
This trend suggests that the market has already experienced significant deleveraging among investors, setting the stage for a potential rebound without the necessity of more drastic declines. Currently, the market appears to be navigating the final stages of an upward cycle marked by heightened risk and challenging conditions for investors. Yet, with the evident oversold condition, the likelihood of a market rebound is increasing. While the current state of the market indicates a possible rebound, it is still premature to conclude that a prolonged bear market has commenced, as indicated by CryptoQuant in its report.
“It is crucial to closely monitor the following factors: The strength and magnitude of the rebound; Whale movements and changes in on-chain data at the time of the rebound; The correlation with stock market and economic trends.”
Bitcoin’s Expanding User Base Signals
Despite the intense volatility in the market, certain groups of Bitcoin holders have started accumulating Bitcoin. Furthermore, the total number of Bitcoin holders, characterized by non-empty wallets, has surpassed 54.71 million and is approaching its all-time high of 54.72 million recorded on January 19th—mere 0.018% away from that peak.
This increase in holders can largely be attributed to two main factors: network growth and larger wallets splitting into smaller ones. Even though Bitcoin endured nearly eight weeks of extreme price volatility following its all-time high of $109,000 in January, the expanding user base remains a promising sign amid the recent market turbulence.
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