Wedson Warns of Downside Risks in Bitcoin Price Rally

Bitcoin's recent price recovery has sparked renewed optimism in the cryptocurrency market, but one analyst remains cautious. Joao Wedson, founder of Alphractal, points out that on-chain data suggests a more sobering picture.

The MVRV Z-Score indicator, which measures investor behavior and realized value, is currently forming three separate peaks during the 2024-2025 period. This is similar to what happened in the 2017 bull market before Bitcoin reached its all-time high.

Wedson notes that after the previous peak, the MVRV Z-Score formed a base between approximately 0.25 and 1.16, but this time around it has not yet fallen into the negative zone associated with major cycle lows in the past.

The analyst warns that if the current decline is not the ultimate bottom for Bitcoin, the price could fall to at least $53,000 or even lower. He emphasizes that his assessment is based on on-chain data alone and not a reflection of the current bullish narrative in the market.