Bitcoin's Price Plunge: Too Early to Call a Bottom, Says CryptoQuant

Bitcoin's recent price crash has led many to speculate about a potential market bottom, but CryptoQuant's Head of Research, Julio Moreno, has advised against calling it just yet. In a recent post, Moreno highlighted the trend in on-chain data, particularly the Market Value to Realized Value (MVRV) Z-Score, to support his stance.

The MVRV Z-Score compares the market capitalization of Bitcoin with its realized capitalization, which represents the total value of the BTC supply based on the last transacted price on the blockchain. This metric provides insights into the profit-loss status of Bitcoin's user base. Moreno noted that all valuation metrics are currently in correction territory, suggesting that it may take more time for Bitcoin to reach a bottom.

The MVRV Z-Score has recently plunged below its 365-day moving average (MA), a level that has historically indicated notable periods of struggle for the Bitcoin price. Although the metric remains above zero, which signifies an overall market loss, its recent decline suggests that investors are experiencing losses. The duration of Bitcoin's stay below the 365-day MA will determine how long it takes for the price to reach a bottom.

At the time of writing, Bitcoin is trading around $86,300, down more than 11% over the last seven days. The price appears to have been sliding down recently, as indicated by the chart from TradingView. Despite the recent decline, Moreno's analysis suggests that it may be too early to call a bottom for Bitcoin, as on-chain data continues to indicate a correction in the market.