A well-known crypto analyst has identified a key indicator that could signal the end of Bitcoin’s bull market when it eventually occurs.
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In a recent video, Benjamin Cowen highlighted the importance of the MVRV Z-score, a tool that evaluates Bitcoin’s current market value relative to the price at which each coin last moved. This measure helps determine if Bitcoin is in an undervalued, overvalued, or neutral position. Cowen explained that previous Bitcoin market tops have often aligned with MVRV Z-scores ranging from 7 to 10. Historical data shows the first cycle peak hit an MVRV Z-score of 7.68, with later cycles even surpassing this figure. The most recent cycle reached a score of 7.15.
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As of now, Bitcoin’s MVRV Z-score stands at 3.29, significantly lower than the levels typically seen at market tops. Cowen believes that this metric can be a valuable tool in assessing whether the market is experiencing genuine bullish euphoria or just a temporary spike. He referenced March 2024, when the market felt overheated but didn’t actually mark the top according to this metric.
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Cowen concluded that the MVRV Z-score, alongside other analytical charts, will be essential for understanding the future direction of Bitcoin’s market and for making more informed decisions as the market evolves.
