Bitcoin just flashed the same on-chain signal that preceded some of its biggest rebounds in recent years. After the October 11 sell-off, the MVRV ratio slipped below its 365-day moving average—a setup that, according to CryptoQuant analyst ShayanMarkets, marked local bottoms before rallies of roughly 135% (mid‑2021), 100% (June 2022), and 196% (early 2024). With MVRV hovering near 1.9 and just under its yearly trend, traders are asking: is a Q4 recovery brewing again?

What Just Happened

The Market Value/Realized Value (MVRV) ratio—market cap divided by the realized cap—fell below its 365-day SMA. Historically, when MVRV dips beneath this long-term average and then turns higher, it has coincided with a local bottom and the start of medium-term upside. Today’s reading sits slightly under the average, signaling potential accumulation pressure if the metric curls up.

Why This Matters to Traders

MVRV compares price to the average on-chain cost basis of holders. When it trends below its yearly mean, market risk typically compresses and forward returns have skewed positive—especially if the metric reverses higher. This can shift risk/reward in favor of patient positioning rather than panic selling into weakness. The analyst notes that a renewed upturn from here could validate the recent drop as a cyclical bottom and support a constructive Q4.

How to Turn the Signal Into a Plan

• Wait for confirmation: Set alerts for MVRV turning up and reclaiming the 365D average; avoid front‑running if momentum keeps weakening.
• Pair with price structure: Look for a daily higher low and reclaim of the post‑crash range mid/upper bands before sizing up.
• Check derivatives health: Favor a reset in funding and open interest after the sell‑off; fading euphoria on bounces reduces squeeze risk.
• Stagger entries: Consider a tiered or time‑based approach (DCA) while price is below key moving averages; predefine invalidation.
• Match timeframe: This is a medium-term on-chain signal—align position size and leverage accordingly, not for intraday scalps.

Key Risks and Invalidation

- On-chain signals can lag; MVRV may stay depressed if macro/liquidity headwinds persist. - Fresh lower lows on price or a failure to reclaim key levels weakens the bottom narrative. - Event risk (regulatory headlines, risk‑off in broader markets) can override on‑chain improvement.

Bottom Line

MVRV slipping below its 365D average has repeatedly marked buy-the-dip conditions—provided the metric turns up. If history rhymes, a constructive Q4 is on the table, but disciplined confirmation, risk controls, and multi-signal alignment remain essential.

If you don't want to miss any crypto news, follow my account on X.