Bitcoin [BTC] price action has been in consolidating for the week. However, the king coin’s 30 day Market Value to its Realized value [MVRV] reading has recorded a clear drop into the negative territory for the very first time since September 30 this year. The metric which measures the average returns of investors indicated that the flagship crypto asset has fallen into the underbought zone in a span of 5 weeks, propelling new hope for bullish investors. Shedding further details, prominent on-chain market intelligence platform, Santiment observed,
Bitcoin’s 30-day MVRV, measuring the returns of 30-day trading addresses, indicates that it’s crept into negative territory for the first time since September 30th. For bulls, this is a great sign, indicating a mild signal of $BTC being underbought.
MVRV is the metric that depicts the ratio of Bitcoin‘s market value to its realized value. A reading above 3.7 indicates massive selloffs in the event of the crypto asset’s price topping out. On the other hand, an MVRV below 1 signals increasing buying pressure among traders in anticipation of BTC bottoming out. Currently, the reading stands a little below 1 which means there is further upside potential for the crypto asset’s price movement.
In short, Bitcoin is currently in the underbought territory but more and more investors are rushing in to expand their position. Many market speculators believe that it could be primed for another bull run, hence trimming their decade-long allocation and adding it, BTC may be the way to go. Many institutional players have resorted to trimming their Gold positions to rake in more Bitcoin. One such is Jefferies’ Chris Wood.
Investors rush towards Bitcoin [BTC] leaving yellow metal behind
Christopher Wood, who leads the Equity Strategy division at Jefferies, has recently added another 5% weightage to his Bitcoin portfolio along with the existing five percentage allocation initiated in December last year. With the latest addition, Wood has increased the total share of BTC to 10% by cutting down his gold allocation by 5%.
In his weekly analysis, Wood said he has not yet given up on gold but added that Bitcoin is gradually replacing the yellow metal as a store of value and warned that ignoring reality would be risky for ‘aging gold bugs’. He, however, is yet to add Ethereum to the pension fund portfolio because he believes that the altcoin is not a store of value but has the potential to surpass Bitcoin in the near future.
In addition to that, he also said that the cryptocurrency industry has slowly started to gain traction in the conventional financial ecosystem and that banks along with other legacy financial establishments should focus on working together and capitalize on the burgeoning blockchain technology rather than adopting a “wait and watch” approach and be disrupted by it.