Bitcoin‘s value has seen a significant increase this year, doubling to over $34,000. This growth, however, doesn’t appear to be reaching a peak according to IntoTheBlock’s MVRV ratio analysis, which was mentioned in their weekly newsletter. The MVRV ratio, an on-chain indicator measuring the difference between Bitcoin’s market capitalization and realized capitalization, is currently at 170%, notably lower than the historical peak level of 300%. This suggests that there may be room for further growth in the Bitcoin bull market.
Market capitalization, which is the total dollar value of circulating supply, and realized value, the paid value for all coins, are key metrics used to determine valuation levels. High levels suggest overvaluation while low levels indicate undervaluation.
In addition to the MVRV ratio analysis, another factor pointing towards potential growth for Bitcoin is the low investor interest in meme cryptocurrencies like SHIB. Despite Bitcoin’s 27% surge this month, the dollar value tied up in SHIB perpetual contracts on Binance remains steady at $35 million. This lack of movement suggests that Bitcoin’s peak could exceed $35,000.
However, investors should remain cautious as rising geopolitical tensions and an ongoing oil rally could trigger broad-based risk aversion and exert downward pressure on Bitcoin. Macro forces and potential black swan events could also cause a market correction following the recent appreciation.
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https://www.investing.com/news/cryptocurrency-news/bitcoins-potential-for-growth-despite-doubling-in-value-this-year-93CH-3214012
