Key Takeaways
- •Bitcoin's MVRV ratio dropping below its 365-day average signals a local bottom, historically preceding significant price rallies.
- •Analysts suggest that capital rotation from gold could fuel a Bitcoin rebound.
Bitcoin's MVRV Metric Signals a "Local Bottom"
Bitcoin (BTC) could be poised for a sustained recovery in the coming weeks, as a key valuation metric sends a bullish signal. Crypto analysts believe the BTC market might be forming a “cyclical bottom.”
Bitcoin’s Market Value to Realized Value (MVRV) ratio, an indicator that measures whether the asset is overvalued, recently slipped below its 365-day moving average. This indicates that BTC could be at a local bottom, according to CryptoQuant analyst ShayanMarkets.
The MVRV ratio currently stands near 1.9, slightly below its 365-day moving average. Historically, each time the ratio dropped below the 365 SMA, it has marked a buying opportunity and a local bottom signal.
The last occurrences of this pattern were in mid-2021, June 2022, and early 2024, which preceded 135%, 100%, and 196% rallies in BTC price, respectively. This consistent pattern suggests that Bitcoin is once again entering an undervalued phase, where long-term holders typically begin accumulating.
With an 18% Bitcoin price drop to $103,530 on Friday from its all-time high of $126,000, the MVRV declined. This reflects reduced speculative excess and growing long-term confidence. If this metric begins to turn upward from current levels, it could confirm that the recent sell-off was a cyclical bottom formation, supporting a renewed bullish phase into Q4.
If history repeats itself, Bitcoin price could embark on a prolonged recovery. Analysts project short-term targets around $115,000 and even as high as $190,000 if the last leg of the bull run unfolds.
Capital Rotation from Gold to Boost BTC Price
Data from Cointelegraph Markets Pro and TradingView revealed that gold is down 8.5% from its all-time high of $4,380 reached on Monday.
This is described as a “pretty harsh move on gold.” If this trend continues, it would signify that gold has peaked for the moment. This could be a sign that a rotation into Bitcoin and altcoins may be starting.
The U.S. Consumer Price Index (CPI) report for September is expected to be released on Friday, according to the Bureau of Labor Statistics.
A soft CPI print should trigger the fuel for potential rate cuts and the end of the government shutdown. This would allow Bitcoin to start running as risk-on appetite comes back into play.
Bitwise says a 5% capital rotation from gold to Bitcoin could send BTC to $242,391 👀 pic.twitter.com/FwvjneWhdX
— Bitcoin Archive (@BTC_Archive) October 21, 2025
Bitwise analysts suggest that a 5% shift from gold to Bitcoin could drive the price of Bitcoin to $240,000.
As Cointelegraph reported, gold’s ongoing pullback could trigger Bitcoin’s rebound, with technical analysis projecting a BTC price rally to $150,000–$165,000 by year’s end.