Bitcoin (BTC) may be entering a favorable buying zone, as indicated by two popular metrics used by cryptocurrency analysts to track on-chain trading activity. These metrics, market value to realized value (MVRV) and the open interest (OI) weighted funding rate, suggest that Bitcoin is currently at an attractive entry point for traders.
According to pseudonymous trader Mister Crypto, “This is the best moment to buy Bitcoin,” in a post on X, a popular social media platform.
Bitcoin’s OI weighted funding rate, which represents the cost of holding Bitcoin futures positions, recently turned positive after being in the negative zone for 24 hours. It is currently at 0.0093%, significantly lower than the 0.0714% recorded at the beginning of April. Analysts view this correction as favorable for the market, with on-chain analyst Checkmate stating, “One of the healthiest market resets I have seen in a long time,” and Crypto Banter host Kyle Doops adding, “Rates holding strong. Bitcoin ready for liftoff.”
The higher funding rates indicate increased interest in long trades, reflecting a more bullish sentiment in the market. The last time Bitcoin’s OI weighted funding rate peaked significantly in early March, Bitcoin reached an all-time high of $69,200 on the same day.
The MVRV indicator, which measures whether Bitcoin is over or undervalued relative to its fair value, also suggests that Bitcoin is in a favorable buying condition. At the moment, Bitcoin’s MVRV score is 2.32, down 6.45% since the start of April. An MVRV score above 3.5 indicates that the market is nearing its peak, while a score below 1 suggests that the market has reached its bottom.
According to Charles Edwards, founder of the Capriole Investments fund, while funding rates are a good indicator, it is now more complex to consider due to the involvement of more parties in the market.
Overall, the current MVRV levels indicate that there is room for growth in the next year. However, the current buying opportunity is not as lucrative as it was a few years ago.
Please note that this article does not contain investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.