Bitcoin Short-Term Holders Sit on 10% Loss as MVRV Z-Score Falls to 0.54, Nearing On-Chain Cost Basis

Bitcoin has stayed below the average cost of its short-term holders for five straight days and is nearing the market’s overall on-chain average cost, analyst Axel Adler Jr. wrote on November 13. Bitcoin briefly fell to around $68,000.Short-Term Holders 10% Under WaterThe short-term holder realized price is the average price at which recently moved coins last changed hands. It stands at $75,429. With bitcoin around $68,000, the price-to-cost ratio is about 0.90, which means recent buyers are sitting on an average paper loss of about 10%. The gap between the market price and their average cost is widening.MVRV Z-Score Drops to 0.54The MVRV Z-Score fell 0.13 over the past week to 0.54. The metric compares bitcoin’s market value with its realized value, the average price at which all coins last moved. It is still positive, but the cushion of unrealized profit across the market is shrinking. A reading below zero would mean the price has fallen below the on-chain average cost.What History ShowsLate 2022: when the MVRV Z-Score last turned negative, it coincided with the final capitulation of that bear market.August 19: the last time it came this close to zero, bitcoin traded around $69,335 and rose about 14% over the following week.Past year: the metric has been at or below its current level on 38% of trading days.What to WatchAdler said bitcoin is still in a correction phase. A sustained move back above the short-term holder realized price of $75,429 would strengthen the case that the market is building support. A drop of the MVRV Z-Score below zero would point to deeper weakness.