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Here's why Bitcoin could drop by another 20%!

Wed 17 Apr 2024 ▪ 3 min of reading ▪ by Eddy S.
Regulation Crypto

A renowned analyst waves a red flag with their latest forecasts. According to their in-depth technical analysis, the Bitcoin MVRV ratio is pointing towards a worrying level of 2.23, suggesting a painful correction of about 20%. A drop that could send prices plunging back to $50,000… 

Bitcoin Crypto

Bitcoin Could Fall Further 20% for This Reason! 

The MVRV ratio (Market Value to Realized Value) plays a crucial role in gauging the health of the Bitcoin market. By measuring the discrepancy between the current capitalization and the average historical purchase price, it provides a valuable insight into the premium or discount applied by investors. When this ratio climbs to dizzying heights, it usually acts as a warning signal indicating a potentially overvalued and overheated market.

At present, the Bitcoin MVRV ratio stands at 2.23, far exceeding the historical average. Consequently, a correction of around 20% seems to be on the horizon, which would equate to a drop in the Bitcoin price to about $50,000. Bitcoin analyst Lupin isn’t crying wolf, though. His analysis is in the context of a historical backdrop where recovery periods in the crypto markets are marked by strong bullish pushes, followed by necessary phases of consolidation.

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Key Factors to Keep a Close Watch On

While technical analysis are a reliable alarm bell, other fundamental factors may influence the future trajectory of the Bitcoin market. Key elements to note include capital outflows from ETFs, unexpected shifts in interest rates, geopolitical tensions (notably the ongoing conflict between Iran and Israel), and adjustments in market dynamics.

Savvy Bitcoin investors will closely monitor these macroeconomic and geopolitical indicators while keeping a watchful eye on signals from technical indicators such as the MVRV ratio. 

When a respected analyst rings the alarm bell, investors need to remain on alert. While such shocks may seem alarming for Bitcoin, they are an integral part of the lifecycle of crypto-assets. Those who adjust their investment strategy accordingly, prioritizing proactive risk management, will be best equipped to weather this potential new storm and seize upcoming opportunities.

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Eddy S. avatar
Eddy S.

Le monde évolue et l'adaptation est la meilleure arme pour survivre dans cet univers ondoyant. Community manager crypto à la base, je m'intéresse à tout ce qui touche de près ou de loin à la blockchain et ses dérivés. Dans l'optique de partager mon expérience et de faire connaître un domaine qui me passionne, rien de mieux que de rédiger des articles informatifs et décontractés à la fois.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.