Binance Bitcoin Exits and MVRV Ratio Signal Protracted Bullish Setup, Analyst Finds

Bitcoin (BTC) fell slightly after reaching an intraday high of $106,704. As of writing, BTC is at $104,686, which has seen a minimal 0.4% gain over the last 24 hours. Despite this minimal pullback, Bitcoin is still just 3.8% short of its all-time high of $109,000, which was reached in January — a clear sign that the bull momentum is still firmly in effect.

Strategic Accumulation as Reflected in Exchange Outflows

On-chain fundamentals continue to be in favor of a positive story, with strategic buying exceeding speculative selling. One of the major indicators is the return of massive BTC withdrawals from centralized exchanges such as Binance and Kraken, which has the propensity to reflect a move towards long-term holding rather than short-term selling.

Over 3,090 BTC, valued at approximately $325 million, was withdrawn from Binance within a day, according to CryptoQuant QuickTake writer Amr Taha. This follows major Ethereum withdrawals, including 76,000 ETH from Binance and 170,000 ETH from Kraken, which signal a general change in direction in the market.

These are massive outflows that are in line with long-term trends of accumulation and are in line with industry-wide trends, such as Circle's IPO ambitions and M&A with Coinbase and Ripple," Taha said.

MVRV Ratio Implies Higher Upside Potential Taha was also adamant about the Market Value to Realized Value (MVRV) ratio as a sentiment indicator. The 2.33 MVRV reading is still below the 2.75 danger level, a level that has been traditionally related to overbought market conditions and their consequent corrections.

"The last time MVRV crossed 2.75, Bitcoin experienced a five-month downturn. But the current reading is not showing that the market has crossed that over-optimism threshold yet," clarified Taha.

This sub-critical level of MVRV reading means that Bitcoin still has room to appreciate before it hits levels traditionally linked with major profit-taking.

Market Structure Is Propelling Uptrend Extension

Taha thinks that the market is currently in the accumulation stage, as reflected in a drop in exchange reserves and a neutral MVRV ratio. The falling supply of BTC on exchanges minimizes the chances of sudden sell-offs, as long as buyer appetite remains consistent.

"The weakening exchange balances and muted MVRV reflect moderate investor optimism," Taha added, citing institutional and big retail investors as seemingly gearing up for future profits.". As long as the MVRV ratio does not increase to its all-time warning level, on-chain metrics are still in a bullish setup for Bitcoin.

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