The on-chain analytics firm Glassnode has revealed the level Bitcoin would have to rise to if it has to reach the historical top zone in this pricing model.
Bitcoin Hasn’t Surpassed Last MVRV Pricing Band Yet
In a new post on X, Glassnode has discussed the extreme euphoria threshold of the Bitcoin Market Value to Realized Value (MVRV) Pricing Bands. The MVRV Pricing Bands is a pricing model for the cryptocurrency based on the MVRV Ratio.
The “MVRV Ratio” is a popular on-chain indicator that tracks how the value held by Bitcoin investors (i.e., market cap) compares against the value that they initially invested (the realized cap). A metric greater than 1 signifies that investors are holding more value than their initial investment, placing them in a state of net profit. Conversely, a value under this threshold indicates that the market as a whole is underwater.
Historically, when holders find themselves in significant profit, it often signifies overheated conditions for Bitcoin, as mass sell-offs motivated by profit-taking become likely. Similarly, the dominance of losses has typically led to market bottoms, given that sellers are scarce during such periods.
The MVRV Pricing Bands aim to encapsulate this dynamic, outlining specific price levels for the cryptocurrency that align with crucial markers in the MVRV Ratio.
Here is the chart for the model shared by Glassnode that illustrates the trend in Bitcoin pricing bands over the past several years:
From the graph, it’s apparent that the 0.8 pricing band—where the MVRV Ratio assumes a value of 0.8—has historically marked bear market bottoms for the asset. Presently, Bitcoin is far above this level, trading at $33,100, and sits at a considerable distance from the 1.0 level of $41,300, indicative of the cost basis for the average investor on the network.
The current pricing bands for Bitcoin are the 2.4 and 3.2 levels, pegged at $99,300 and $132,400, respectively. The latter has historically indicated that the bull market is heating up.
While Bitcoin can remain within this zone for some time, surpassing the 3.2 level would imply an imminent market top.
The chart below demonstrates just how rare it is for the asset to trade above the 3.2 level:
“BTC price has historically spent only ~5% of trading days above the 3.2 MVRV level,” Glassnode notes. “This highlights the rarity of such peaks and emphasizes why this zone is often deemed ‘extreme euphoria.’”
To date, Bitcoin has not managed to surpass this threshold in the current cycle. If past bull markets are any indication, the peak is likely to occur above this level, suggesting further upside potential for the asset in the ongoing cycle. However, it remains to be seen whether this pattern will hold true.
BTC Price
As of writing, Bitcoin is trading around $93,400, having declined more than 3% over the last week.
