Key Points
- President Trump’s plan to impose a 25% tariff on the EU adds pressure to the volatile crypto market.
- Crypto analyst Chapo predicts Bitcoin’s MVRV could peak at 3.2, indicating further bullish momentum.
The crypto market is facing additional pressure following U.S. President Donald Trump’s announcement of a 25% tariff on the European Union. This move is causing further instability in global financial markets.
This recent development is amplifying the existing volatility in digital assets, heightening concerns about economic uncertainty.
Optimistic Outlook on Bitcoin
Despite the ongoing volatility, some analysts remain hopeful. Assure DeFi CEO and crypto analyst Chapo believes that Bitcoin still has potential to peak in this cycle.
Chapo referred to Bitcoin’s Market-Value-to-Realized-Value (MVRV) ratio, a critical metric for assessing valuation. He shared his insights, predicting a peak MVRV this cycle around 3.2, suggesting further bullish momentum in 2025.
It’s worth noting that Bitcoin’s MVRV last reached this level in April 2021, when its price surged to $58,253—a 101% increase from $28,994.
Understanding the MVRV Ratio
The MVRV ratio, which evaluates whether an asset is overvalued or undervalued by comparing market capitalization to realized capitalization, currently stands at 1.95. However, Chapo pointed out that the current MVRV is at 2.09. This implies that the average Bitcoin holder has more than doubled their initial investment.
Historically, the MVRV sees sharp increases when Bitcoin is nearing its cycle peak, reinforcing the belief that the market remains in a strong bullish phase.
At the time of writing, Bitcoin was trading at $86,113.30 after a 3.47% drop in the last 24 hours. The cryptocurrency dipped to $88,000 following Trump’s previous tariff announcement on Canada and Mexico, highlighting the complex market dynamics at play.
Short-term holders have responded with panic selling, while long-term investors continue to show resilience. As volatility continues, the market is waiting for further signals. It is yet to be determined whether Bitcoin has found a stable support level or if more corrections are on the horizon.
