Last updated on April 30th, 2024 at 01:44 pm
Bitcoin could be entering an attractive buy zone, according to two popular metrics used by cryptocurrency analysts to track on-chain trading activity.
The Market Value to Realised Value (MVRV) and Open Interest (OI) weighted funding rate metrics suggest that Bitcoin, currently priced at $63,968, could be at an enticing entry point for traders.
The MVRV indicator, used to gauge whether Bitcoin is over or undervalued compared to its fair value. A score above 3.5 on the MVRV indicates that the market is nearing its peak, while a score below one suggests it has reached its lowest point.
Bitcoin’s current MVRV score stands at 2.32, reflecting a 6.45% decrease since the beginning of April, as per data from LookIntoBitcoin. This indicates that Bitcoin has moved further into favourable buying conditions.
On the other hand, Bitcoin’s OI-weighted funding rate, which represents the cost of holding Bitcoin futures positions, recently breached positive territory after spending 24 hours in the negative zone, posting 0.0093%, according to CoinGlass data. This rate is significantly lower than the 0.0714% recorded at the beginning of April, which analysts view as favourable for the market.
In early March, the last time Bitcoin’s OI-weighted funding rate surged, Bitcoin hit an all-time high of $69,200 on the same day. Just a week later, on March 14, it surpassed that record, reaching $73,835, based on CoinMarketCap data.
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The rise in funding rates indicates growing interest in long trades, and it appears that traders and market watchers believe in this optimistic outlook of the market.
“One of the healthiest market resets I have seen in a long time,” declared on-chain analyst Checkmate in an April 24 post.
Crypto Banter host Kyle Doops in an April 24 post also echoed the same sentiment, stating, “Rates holding strong. Bitcoin ready for liftoff.”
Disclaimer: This piece is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
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