Bitcoin ($BTC), after falling below $60,000, recovered to over $63,000 at the start of the new week.
While it remains to be seen whether this recovery will continue, one analyst stated that Bitcoin’s current state mirrors the 2022 bear market and that a recovery will take time.
Speaking to CoinDesk, FxPro senior market analyst Alex Kuptsikevich stated that the current Bitcoin market situation resembles mid-2022 and that a full trend reversal could take several months.
Kuptsikevich noted that $BTC is trading near the 200-week Simple Moving Average (SMA) level, which has historically served as a battleground for bulls and bears at major cycle turning points.
Kuptsikevich noted that the market sentiment index had fallen to eight, indicating a slowdown in downward momentum, but that a definite upward trend could take months to emerge, similar to what happened in 2022.
Analysts suggest that Bitcoin’s recovery could take months, while the MVRV-Z Score, a key on-chain metric closely watched by investors, is also nearing its bottom.
Market analyst Omkar Godbole notes that the MVRV-Z Score, a key on-chain indicator for Bitcoin, is approaching its lowest levels since past bear markets. This suggests the bear market may be over.
Accordingly, Bitcoin’s MVRV-Z score is approaching levels seen at the bottom of historically large bear markets, increasing the likelihood of a recovery.
According to the analyst, in the past, Bitcoin’s major cycle bottoms occurred when the MVRV Z-score approached or fell below zero.
The analyst noted that, according to the data, the score is currently at 0.24, just above the near-zero green zone, which has historically been considered a strong buy signal.
At this point, the analyst cited the bear markets of 2014, 2018, and 2022 as examples, emphasizing that strong recoveries in Bitcoin began after the MVRV-Z Score fell below zero during these bear cycles.
*This is not investment advice.
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