Bitcoin price possibly rising: high-conviction accumulation?

Today a scenario has emerged that leads to the hypothesis that the price of Bitcoin may be rising in the coming days.

This is only a hypothesis, but it is supported by at least one clear element.

To tell the truth there is also another dynamic that suggests this, but that dynamic only suggests a small short-term rebound, while the clear element suggests a potentially longer and more extensive rise.

The MVRV ratio

The Market Value to Realized Value ratio (more commonly called MVRV) is an on-chain indicator that measures how much Bitcoin’s current market price deviates from its “realized value”.

It is calculated as the ratio between the current price and the average price of all $BTC at the time of their last on-chain movement.

For example, right now the price (Market Value) is about $77,000, while the RV (Realized Value) is just over $54,000. Therefore the MVRV ratio is equal to 1.42.

To calculate RV, you sum the dollar value that all $BTC on the Bitcoin blockchain had at the moment they were moved for the last time (i.e., used).

Technically, the Realized Value is an estimate of the average purchase cost of all existing $BTC, therefore including the one million $BTC held by Satoshi Nakamoto and never used.

The bullish signal

The analyst AliCharts on X today pointed out that the MVRV ratio has recently slipped below its 180-day moving average.

AliCharts states that, while standard technical models consider this move as a cooling-off phase, he instead sees it as a high-conviction accumulation phase.

In fact, he argues that when the MVRV ratio is positioned below the 180-day moving average, it means that the market is effectively eliminating the premium and incorporating a deep discount.

He adds:

“Historically, these specific periods mark exactly the base on which long-term smart money builds its positions.

As long as the ratio consolidates below this 180-day line, the short-term trend will remain compressed, offering a highly strategic accumulation window”.

Although it is not exactly a clearly bullish signal, it should still mean that an accumulation phase is underway in anticipation of a rise.

The short term

The accumulation phase hypothesized by AliCharts takes time to be successfully completed.

Therefore it can only affect the price trend in the medium to long term, while in the short term other dynamics come into play.

In particular, there is one that suggests there could be a small rebound.

In fact, on the one hand Bitcoin’s price has seemed excessively compressed since Friday, while on the other hand yesterday the whales at a certain point started buying, opening new long positions.

However, these are probably short-term long positions, therefore they are not indicative of a major rebound. The hypothesis is that the whales might only be expecting a return to $78,000 or $80,000 in the coming days.

The medium term

The problem is that the hypothesis put forward by AliCharts clashes with the fact that significant purchases by holder whales, that is, those who do not just do short-term trading but accumulate with longer time horizons, are still not visible.

It should be emphasized, however, that what AliCharts has shown is a fairly recent phenomenon, and therefore perhaps the truly important accumulation phase may simply not have started yet.

In other words, the trend of the MVRV ratio allows us to hypothesize a possible start of a new accumulation phase, but for now this is not yet visible.

There was instead a similar accumulation phase between February and March, particularly when the price of $BTC fluctuated between $68,000 and $70,000.

However, that accumulation phase ended when the price exceeded $70,000, and for now another one does not yet seem to have started.

There is still the theoretical possibility that between yesterday and today another one may actually have started, given the recent whale purchases, but for now there is no concrete signal confirming this.

The forecasts

To tell the truth, the short-term technical sentiment is mixed, with some bearish technical signals and others bullish.

However, if in the coming days it manages to break through the $82,000 wall, the next technical targets would be in a range between $88,000 and $95,000. The alternative seems to be a lateral consolidation between $75,000 and $82,000..

There are, however, several medium-term forecasts circulating that confirm AliCharts’ hypothesis.

In fact, there is a sort of “institutional consensus” on this, even if public statements sometimes serve mainly to spread optimism or pessimism, rather than to release real forecasts.

It must finally be remembered that things can always change, even quickly, in the event of major news, and the current macroeconomic and geopolitical picture suggests that some important news could still arrive between now and the end of the year.