Bitcoins on chain trends indicate that the worst may be over

The MVRV ratio suggests that Bitcoin may be entering an early bounce-back phase.

For several weeks, the crypto market has been trapped in a slow decline.

Bitcoin has been struggling to regain its footing following October's black swan event, the largest liquidation cascade in crypto history.

Bitcoin briefly fell below $110,000 and, nearly a month later, is still hovering around $103,000.

Yet, despite this gloomy situation, on-chain data tells a different story – calm accumulation and signs that the worst is probably behind us.

Long-Term Bitcoin Holders Are Moving

According to data from CryptoQuant, Bitcoin accumulation has reached an all-time high.

In the past 30 days alone, investors have purchased over 375,000 Bitcoin (BTC), including 50,000 Bitcoin in the past 24 hours.

In fact, the number of accumulation addresses, i.e., wallets that are consistently investing but have not recently withdrawn, has risen to record levels.

These long-term holders tend to buy when the environment is weak and prices appear weak, indicating continued confidence in Bitcoin's long-term trajectory.

In less than two months, the monthly average has more than doubled from 130,000 Bitcoin to 262,000 Bitcoin.

Although broader market demand has declined, these wallets have continued to accumulate Bitcoin—partially driven by demand from ETF investments and institutional investment.

Market Fears, But Strong Fundamentals

The October decline was caused by renewed fears of US-China tariffs and a stronger dollar, which spooked leveraged traders.

But as broader pressure eases, investor confidence is regaining.

Bitcoin remains above the crucial psychological level of $100,000, while the Fear and Greed Index remains in "extreme fear" territory at around 20.

Historically, such levels have often been preceded by strong rally gains.

This optimism is supported by Bitcoin's MVRV ratio, a key on-chain metric that compares the coin's market price to its intrinsic value (essentially the amount investors paid for it).

It helps measure when the exchange-traded price is below "fair value" and is also important for identifying market tops and bottoms.

According to data from CryptoQuant, this ratio is now around 1.8, its lowest level since April 2025. This typically occurs when Bitcoin reaches a mid-term low or begins a new correction.

On-chain signals point to a reversal, not a market decline. Despite fear-driven selling and increased volatility, actual losses have been moderate, suggesting prudent repositioning rather than capitulation.