Bitcoin (BTC) has recently shown a buy signal despite the ongoing challenges in the cryptocurrency market. Over the past 24 hours, 97,602 traders have liquidated positions, totaling a liquidation value of $274.73 million. The leading cryptocurrency has experienced a 1% decline, with trading volume falling by 20% during the same period.
One crucial on-chain metric, the market value to realized value (MVRV) ratio, reflects an opportunity for contrarian traders. The current 30-day and 90-day MVRV ratios stand at -0.89 and -1.48, respectively. A negative MVRV indicates that the market price is below the average acquisition price for most investors, suggesting that selling at this price would result in a collective loss.
Historically, negative MVRV ratios have been interpreted as a buying signal, indicating that the market may be oversold. This situation can present a potential buying opportunity, as assets trading below their historical acquisition costs may be poised for a rebound.
In response to the buy signal, some traders have started accumulating Bitcoin. Recently, there has been a notable increase in whale activity, with levels of involvement not seen before. This surge further emphasizes the potential for a market turnaround.
While the buy signal is promising, traders should remain cautious due to the prevailing downside risks in the market.
