Bitcoin recently hit a high of over $108,000, fueling further bullish sentiment despite a recent dip. But is this the top of the cycle? One key indicator suggests otherwise.
What the MVRV Z-Score is Telling Us
Crypto analyst Doctor Profit used the MVRV Z-Score, a metric showing whether Bitcoin is overvalued or undervalued, to analyze the current situation. The current score is just above 2, which is considered a neutral zone historically. In previous cycles, Bitcoin only reached its peak when this score climbed well above 8, into the “red zone.”
Historical Data and Future Predictions
Doctor Profit’s chart shows a clear correlation: past Bitcoin price peaks (2011, 2013, 2017, 2021) coincided with the MVRV Z-Score entering the red zone. The current cycle hasn’t seen this happen yet, suggesting there’s still significant upside potential.
A Maturing Market?
Interestingly, the current cycle shows lower highs in the MVRV Z-Score compared to previous ones. This could mean the market is maturing, or that we’re nearing the peak. However, it’s not definitive. The only certainty is that Bitcoin hasn’t topped out until the MVRV Z-Score hits the red zone – and it hasn’t yet.
So, What’s Next?
While the MVRV Z-Score doesn’t provide a specific price target, other analysts predict Bitcoin could reach anywhere from $150,000 to a whopping $500,000. At the time of writing, Bitcoin is trading around $107,740.
