Analyst Benjamin Cowen Outlines Bitcoin Forecast for 2023 Using Key On-Chain Indicator
Popular crypto analyst Benjamin Cowen says an on-chain benchmark indicator suggests Bitcoin (BTC) is set for price action in range for most of this year.
In a new strategy session, Cowen takes a look at the MVRV Z-score indicator, which compares the asset’s realized value to its market value.
The MVRV Z-score extracts the extremes in the data between market value and realized value to attempt to identify long-term trend reversals.
Cowen says that based on the chain metric’s historical movements, BTC could theoretically consolidate in a range until at least 2024 before a sustained bull market rally.
“I would argue that what you’re most likely to see this year is a recovery year, where you spend about half the time moving higher and half the time moving lower. You can break it up into different months , so you know 2018, 2014, 2022, we had eight or nine red months, but in the recovery years it’s split more or less half and half. And I think you’re probably going to see the MVRV Z-score do something like that, where it will come back above the zero line as it is right now, and eventually it will probably come back below it again. And we’re just taking some time to consolidate.”
After a recovery year, Cowen predicts that both the MVRV Z-score and the price of Bitcoin could break out next year and lead to a halving, an event where miners’ BTC rewards are cut in half.
“As we get into 2024 and the next halving, ideally a rally, a more of a sustained rally where we see the MVRV Z-score go to much higher levels. So that’s how I’m playing this year is more or less a recovery year, and that’s what I would argue that the MVRV Z-score kind of says it’s probably going to be as well, especially when you look at it in the context of coming out of these bear markets.”
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Featured Image: Shutterstock/Emanuel Bustos
