Analysis: The MVRV indicator suggests that BTC may experience a strong recovery in the next few weeks.

Odaily Planet Daily News Despite the possible further pullback of BTC, there are signs that its good MVRV score and strong fundamentals will help drive its long-term rise. According to CoinGlass data, the Market Value to Realized Value (MVRV) ratio indicates that despite BTC hitting a new all-time high last week, its price is still undervalued. Its MVRV-Z score has dropped from a high of 3.3 last week to 2.84. Historically, an MVRV-Z score below 3.7 indicates that the asset is undervalued. The MVRV-Z score is an important indicator for measuring the market value and relative value of tokens. Its calculation method is to subtract the realized market value from the circulating market value, and then divide the result by the standard deviation. BTC's MVRV score during the last major pullback in March this year was 3.03, compared to 7 in the last major pullback in January 2021. Based on this, the score suggests that BTC may experience a strong recovery in the coming weeks. In addition, Bitcoin (BTC) has some strong fundamentals, including a circulating supply of BTC that has dropped to a multi-year low of 2.24 million coins. In September this year, there were over 2.72 million BTC on exchanges. This indicates that more and more investors are buying BTC and storing it in self-custody wallets, with some investors accumulating ETF shares. Another potential catalyst for BTC is that the market value of stablecoins has surged from $122 billion a year ago to nearly $210 billion. At the same time, the annual inflation rate of Bitcoin continues to decline, dropping from a high point of nearly 12% in 2015 to 1.12%. The decrease in inflation rate is due to the halving event and the increase in mining difficulty. (crypto.news)