Metric analysis

Crypto Exchange BitMEX Says Metric Reveals When Bitcoin Bear Market Will End

Crypto trading platform BitMEX reveals a metric it believes could signal the end of the bear market.

In a new blog post, BitMEX said based on Bitcoin’s Market Value to Realized Value (MVRV) ratio, BTC is currently at the start of the bear cycle compared to previous bear markets.

MVRV is the ratio of an asset’s market capitalization to its realized capitalization – the value of all Bitcoins at the price they were purchased at, not at the current price.

“Looking at the other three key bear market cycles and measuring them by the market value to realized value ratio, price has been below realized price for an average of 244 days. (This estimate excludes the March 2020 period in the third bear market.) Currently, we are less than 30 days away with the price below the realized price.

According to BitMEX, Bitcoin may begin to recover from early next year based on the average period of previous bear cycles.

“The 244-day blended average of previous time-based capitulation periods (extended periods below the average cost of market participants) would see bitcoin recover above the price level realized in early February 2023.”

The crypto firm claims that Bitcoin’s current bear cycle “doesn’t look all that different” from previous cycles despite the differing macro conditions.

“While much has been written about the macro backdrop regarding the bitcoin market (with our analysis no doubt included), this bitcoin cycle, ironically, does not look all that different from cycles of the past.

At the time of writing, bitcoin is 69.72% below previous all-time highs, with the peak of the decline reaching 71.86% on May 18. Bitcoin’s past bear markets saw declines of 93.08%, 84.82%, and 83.47% respectively. With that in mind, despite the absolute size of this cycle’s decline dwarfing previous cycles, in relative terms it was nothing out of the ordinary for bitcoin.

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