Key insights:
A drop in Bitcoin’s MVRV ratio below its 365-day average indicates a potential local bottom, historically leading to significant price surges.
Analysts suggest that a shift of capital from gold could drive a Bitcoin recovery.
In the upcoming weeks, Bitcoin (BTC) appears set for a robust recovery, as a crucial valuation indicator offers a positive outlook. Crypto analysts suggest the BTC market may be finding a “cyclical bottom.”
MVRV metric indicates a “local bottom” for Bitcoin
The Market Value to Realized Value (MVRV) ratio of Bitcoin, which assesses the asset’s valuation, recently fell below its 365-day moving average. This suggests that BTC might be reaching a local bottom, according to analyst ShayanMarkets from CryptoQuant.
Related: Bitcoin chart mirrors the 1970s soybean bubble: Peter Brandt
The analyst noted in a QuickTake report that “the MVRV ratio is currently about 1.9, just below its 365-day average,” and added:
“In the past, whenever the ratio dropped below the 365 SMA, it signified a buying opportunity and a local bottom.”
This trend was observed in mid-2021, June 2022, and early 2024, preceding BTC rallies of 135%, 100%, and 196%, respectively.
This ongoing pattern indicates that Bitcoin might be “entering an undervalued phase, prompting long-term holders to start accumulating,” the analyst wrote.
With an 18% decline in BTC price to $103,530 from its peak of $126,000, the MVRV has decreased, showing “diminished speculative excess and increasing long-term confidence,” according to the analyst, who added:
“Should this metric begin to rise from current levels, it may validate that the recent sell-off constituted a cyclical bottom formation, paving the way for a renewed bullish trend into Q4.
If historical trends continue, Bitcoin could initiate a prolonged recovery, with analysts estimating short-term targets between $115,000 and as high as $190,000 should the final phase of the bull run occur.
Capital shift from gold to support BTC price
Data from Cointelegraph Markets Pro and TradingView indicate that gold has declined by 8.5% from its all-time high of $4,380 reached on Monday.
This marks a “significant drop for gold,” noted Michaël van de Poppe, founder of MN Trading Capital, in a Tuesday X post.
If this trend continues, it suggests that gold has reached a “temporary peak,” signaling a potential “rotation” into Bitcoin and altcoins, van de Poppe expounded.
The US Consumer Price Index (CPI) report for September is anticipated to be released on Friday, as per the Bureau of Labor Statistics.
“A favorable CPI report could activate momentum for potential rate cuts and resolve the government shutdown,” the analyst remarked, adding:
“Bitcoin may commence a rally as risk-on sentiment returns.”
Additionally, Bitwise analysts propose that a mere 5% shift from gold to Bitcoin could propel Bitcoin’s price to $240,000.
Bitwise asserts a 5% capital rotation from gold to Bitcoin could drive BTC to $242,391 👀 pic.twitter.com/FwvjneWhdX
— Bitcoin Archive (@BTC_Archive) October 21, 2025
As reported by Cointelegraph, the ongoing decline in gold could spark Bitcoin’s resurgence, with technical analysis predicting a BTC price rally to between $150,000 and $165,000 by the year’s end.
This article is not investment advice or recommendations. All investment and trading actions come with risks, and readers should perform their own research before deciding.
