One of Bitcoin’s most watched on-chain bottom signals just flashed again — and the last three times it did, BTC rallied triple digits. After the October 11 sell-off, a subtle move in the MVRV ratio has traders asking whether a new local bottom is forming and if Q4 could turn from fear to opportunity.

What just happened

CryptoQuant analyst ShayanMarkets reports that Bitcoin’s Market Value to Realized Value (MVRV) ratio has slipped below its 365-day moving average, hovering near 1.9. Historically, this crossover marked local bottoms: in mid-2021, June 2022, and early 2024, it preceded rallies of roughly 135%, 100%, and 196% respectively. If the metric now starts to turn upward, it could confirm that the recent sell-off was a cyclical low, setting the stage for renewed strength.

Why this matters to traders

MVRV compares current market cap to the aggregated cost basis of coins on-chain. When MVRV dips below its 365-day SMA, it suggests holders’ unrealized profits are compressed, reducing forced selling and often signaling re-accumulation. For traders, this can be a high-quality context signal — not a trigger by itself, but powerful when aligned with price structure, funding, and liquidity. Still, the signal is not infallible; macro data, liquidity shocks, miner flows, and regulatory headlines can override on-chain trends.

Actionable game plan

• Wait for confirmation: Track MVRV’s turn back up toward or above its 365-day MA. A rising slope is your confirmation, not just a single print below.
• Pair with price structure: Define your range lows/invalidation (e.g., below post-crash lows). Look for higher lows on the daily while MVRV curls upward.
• Scale entries: Consider staged buys or DCA as MVRV recovers, instead of all-in entries during volatility spikes.
• Manage risk: Use strict position sizing and stop-losses, or hedge with options. Keep leverage modest until confirmation builds.
• Seek confluence: Favor longs when funding normalizes, spot leads perps, and on-chain flows (stablecoin inflows, miner-to-exchange outflows) align with an MVRV upturn.
• Set alerts: Automate notifications for “MVRV cross-up” and daily trend shifts to avoid chasing moves.

Key risks and invalidation

If MVRV remains below the 365-day SMA and trends downward, the bottom thesis weakens. A decisive breakdown of recent range lows, negative liquidity shocks, or risk-off macro (rates, dollar strength) can extend drawdowns. Treat the MVRV signal as a probabilistic edge, not certainty — past performance doesn’t guarantee future results.

The bottom line

A historically reliable on-chain metric is hinting at a local bottom. The smart move is patience: let MVRV start curling higher, align it with improving market structure and flows, and only then press risk with discipline. Edges compound when signals agree — not when you rush the first green print.

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