How do on-chain indicators like MVRV and SOPR help beginners understand Bitcoin’s market cycles?
Why is this the correct answer?
This is correct because MVRV and SOPR are on-chain ratios that compare Bitcoin’s market price with the average cost basis of coins or spending profitability. Beginners learn these indicators flag overvaluation when many holders are in profit and undervaluation when most are at a loss. By observing these extremes, investors can gauge when markets may be due for a correction or recovery, helping them time entries and exits within broader market cycles.
Related Terms
AI-Generated Content Disclaimer
Important Notice: This content has been generated with the assistance of artificial intelligence. While we strive for accuracy, there may be errors or inaccuracies in the information provided. Please exercise caution and verify any information before making decisions based on it. This information does not constitute investment advice, financial advice, trading advice, or any other sort of advice. You should not treat any of the content as such. CryptoMeteo does not recommend that any cryptocurrency should be bought, sold, or held by you. Always conduct your own due diligence and consult with a financial advisor before making any investment decisions.