Bitcoin Rallies to $84,400 as Unrealized Profits Rise
Bitcoin has recovered significantly from its June low, rising by 44.2% to around $84,400. This move is greater than the average of historical recoveries from lows, which typically reach only 29.7%. However, the recovery also bears some similarity to a pattern seen in 2021, where a similar drop was followed by another lower low.
The June drop was approximately 53.06%, and historically such large drops have been followed by lower price levels. In particular, 2021 saw a similar 53.10% drop, followed by another lower low. However, the cost basis of Bitcoin at the June bottom is significantly different from that in 2021, with a MVRV (Market Value to Realized Value) ratio of 1.10 compared to 1.55.
The current recovery may be supported by institutional demand, with weekly ETF inflows reaching $2.39 billion and monthly flows exceeding $2.7 billion. Additionally, exchange reserves have decreased, tightening the available supply and limiting selling pressure as prices rise. However, if the price falls below $58,535, it would represent a break into new territory and invalidate the assumption that $58,535 represents a low point.