Important points:
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Bitcoin’s MVRV ratio falls below 365 day average This historically indicates a localized trough prior to a large price increase.
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Analysts say capital turnover away from gold could fuel a rebound in Bitcoin.
Bitcoin (BTC) could be poised for a sustained recovery in the coming weeks as key valuation metrics are sending bullish signals. Cryptocurrency analysts say the BTC market may be forming a “cyclical bottom.”
Bitcoin’s MVRV indicator suggests a “local bottom”
Bitcoin’s market value-to-realized value (MVRV) ratio, a measure of whether an asset is overvalued, recently fell below its 365-day moving average, indicating that Bitcoin may be at a local bottom, according to CryptoQuant analyst Shayan Markets.
Related: Bitcoin charts reflect 1970s soybean bubble: Peter Brandt
“The MVRV ratio is currently near 1.9, slightly below the 365-day moving average,” the analyst said in a QuickTake analysis on Monday, adding:
“Historically, whenever this ratio falls below the 365 SMA, it has been a buying opportunity and a local bottom signal.”
The last time this happened was in mid-2021, June 2022, and early 2024, when BTC prices rose 135%, 100%, and 196%, respectively.
This consistent pattern suggests that Bitcoin is once again “entering an undervalued phase, where long-term holders typically begin to accumulate,” the analysts wrote.
On Friday, BTC prices fell 18% from a record high of $126,000 to $103,530, and MVRV declined, “reflecting reduced speculative excess and increased long-term confidence,” the analyst said, adding:
“If this indicator starts to turn higher from current levels, it could confirm that the recent decline was a cyclical trough and confirm a new bullish phase heading into the fourth quarter.
If history repeats itself, the price of Bitcoin could embark on a long-term recovery, with analysts predicting a short-term target of around $115,000 and as high as $190,000 if the final stage of the bull market unfolds.
Capital rotation from gold to boost BTC price
Gold is down 8.5% from Monday’s all-time high of $4,380, according to data from Cointelegraph Markets Pro and TradingView.
This is “pretty harsh action against gold,” MN Trading Capital founder Michael van de Poppe said in an X post on Tuesday.
If this situation continues, Van de Poppe wrote, it would mean that gold has “reached its peak at this point” and is a sign that a “rotation” toward Bitcoin and altcoins could begin.
The U.S. Consumer Price Index (CPI) report for September is scheduled to be released on Friday, according to the U.S. Bureau of Labor Statistics.
“Weakness in the CPI would trigger a potential rate cut and an end to the government shutdown,” the analyst said, adding:
“Bitcoin will start to rise as risk-on appetite returns.”
Meanwhile, Bitwise analysts suggest that a 5% shift from gold to Bitcoin could push Bitcoin’s price to $240,000.
Bitwise says 5% capital rotation from gold to Bitcoin could help BTC reach $242,391 👀 pic.twitter.com/FwvjneWhdX
— Bitcoin Archive (@BTC_Archive) October 21, 2025
As reported by Cointelegraph, the continued decline in gold could trigger a rebound in Bitcoin, with technical analysis predicting BTC prices to rise to between $150,000 and $165,000 by the end of the year.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.