Bitcoin Nears Two Important On-Chain Levels: What Happened Last Time

Data shows Bitcoin is currently nearing two notable on-chain price levels. Here’s what happened the last time BTC broke above them.

In a new post on X, Glassnode leads on-chain analyst Checkmate points out that BTC has been near two on-chain price levels recently. The first of these levels is the “MVRV +1SD.”

The Market Value to Realized Value (MVRV) ratio is a famous indicator for Bitcoin. In short, it compares the value that BTC holders are currently carrying (that is, the market cap) against the value they put into the cryptocurrency (the realized cap).

This metric is generally used to determine the scale of profit or loss that the market as a whole is carrying right now. Based on this, the fairness of the coin’s price may be judged.

In the context of the current discussion, the +1 standard deviation (SD) of the MVRV ratio from its mean is of relevance. More specifically, the price level at which the market would satisfy this MVRV ratio condition is of focus.

The other on-chain level of interest here is the “Vaulted Price.” This indicator is a product of the “Cointime Economics” framework that Checkmate came up with alongside David Puell from Ark Invest. In reference to this metric, the paper reads:

Vaulted Realized Price may be considered to be a pricing level that reflects the ‘potential energy’ stored in the system. Somewhat counter-intuitively, the more long-term coin accumulation that takes place, the larger the uncertainty becomes between the proportion of truly lost vs. HODLed supply. Vaulted Realized Price will trade lower in this instance, as more cointime accumulation takes place, and uncertainty regarding future distributive pressure builds (and vice-versa).

Now, here is a chart that shows the trend in these two indicators, as well as some other “original” on-chain levels, over the past few years:

As displayed in the above graph, the Bitcoin spot price earlier broke through the Vaulted Price and went to the MVRV +1SD (note that the labeling is flipped in the chart by mistake, as Checkmate has noted in reply to the post).

Since then, the price has come down a bit and is trading under both of these levels. Nonetheless, it currently stands quite near to them and far above the other on-chain price levels like the realized price.

As the chart highlights, the last time cryptocurrency was in this situation was December 2020. Obviously, what followed then was the bull run of 2021.

It remains to be seen how Bitcoin’s interactions with these levels will be this time around and whether a similar euphoric run will follow with a potential break above them.

Bitcoin had shot up above the $72,000 mark earlier, but it has since slumped back again, and it’s now floating around $69,000.