This Metric Shows Now Is the Time to Buy Bitcoin: Santiment

According to data from market intelligence platform Santiment, the Market Value to Realized Value (MVRV) ratio, a key indicator of market sentiment, shows that now is the time to buy Bitcoin (BTC).

📊 When looking to buy low (or sell high), don’t just look at prices… Look at how competing traders have performed. Bitcoin’s average returns (based on wallets making at least 1 transfer in the past 30 days) have a -1.9% return, despite BTC’s all-time high happening just over 3… pic.twitter.com/vAXZMFCmjt

— Santiment (@santimentfeed) December 20, 2024

Buying Opportunity for Strategic Investors

Santiment revealed that Bitcoin’s 30-day MVRV ratio, which gauges traders’ average profitability, has dropped to its lowest level since the October 10 rally began. Despite BTC reaching an all-time high, the average returns for wallets actively trading in the past 30 days declined to -1.9%, indicating a market correction.

Typically, the MVRV ratio hovers around 0% due to the zero-sum dynamics of trading markets, where profits and losses balance out on average. However, the current negative value suggests that many traders are experiencing losses, which could point to a buying opportunity for strategic investors.

While Santiment’s analysis highlights the possibility of a buying zone, it does not confirm that Bitcoin has reached a local bottom. Investors using a dollar-cost averaging (DCA) strategy might find this period advantageous, as this approach spreads investments over time, reducing risks and capitalizing on market corrections.

BTC Still in the Bull Phase

Last month, Santiment also highlighted another indicator that suggests BTC remains in a bullish phase. The platform identified Bitcoin’s Mean Dollar Invested Age, which measures how long the current BTC holdings have been in wallets, as a metric pointing to continued market growth. The metric, representing the average age of all dollars invested in Bitcoin’s market cap, has shown a notable decline.

A rising Mean Dollar Invested Age typically signals long-term holding behavior, while a falling value indicates increased transaction activity. Santiment’s data shows a sharp drop in the metric, suggesting that previously stagnant wallets are now moving older coins back into circulation. This activity often points to heightened utility and reinforces the view that the market is in a bull phase.