Fluctuation and Challenges in Financial Markets: Exploring the Hedging Properties of Bitcoin

In the financial markets, maintaining a sense of awe and independent thinking is crucial. Years of experience tell us that we should not get overly entangled in whether a certain asset is a scam or a belief, but should focus on the trading opportunities and profit potential in the market.

Recently, the financial markets have been turbulent, and traditional safe-haven asset gold has also seen a significant decline, prompting people to rethink safe-haven assets. Bitcoin was once regarded as a potential safe-haven tool, but during the global financial crisis, it too could not escape the difficulties.

When the stock market faced a rare large-scale crash, Bitcoin, as the leader of the cryptocurrency market, also experienced a sell-off. Interestingly, as the stock market showed signs of recovery, the price of Bitcoin rebounded to previous support levels. The movements of the S&P 500 and Bitcoin displayed a high degree of consistency, and Bitcoin reacted to major events such as the Federal Reserve's interest rate cuts and travel bans.

The MVRV( market value to realized value) indicator is an important tool for measuring Bitcoin valuation. Currently, Bitcoin's MVRV has fallen below 1.0, marking the fourth occurrence in history. An MVRV below 1 indicates that the market price is below "fair value," which may signal an investment opportunity.

The calculation method for MVRV is: market value ( current price multiplied by circulation ) divided by actual value ( the total value of each Bitcoin at the last transfer ). This indicator excludes long-term lost or idle Bitcoins, more accurately reflecting the consensus of market participants.

Generally speaking, when the MVRV is below 3-3.5, it may be a good time to build positions; when it exceeds 3.5, one should be wary of the risk of decline. However, a high MVRV may also trigger profit-taking, leading to a price drop.

The current market value of Bitcoin has fallen below the cost line, entering the green zone of MVRV, which is rare in history and may be a buying opportunity worth paying attention to.

Although the market outlook is not very clear, opportunities always favor those who are prepared. By staying alert and accurately grasping the market pulse, it is still possible to gain profits amidst the turbulence.

Finally, a reminder: the cryptocurrency market is subject to significant fluctuations, and investors must approach it rationally and make cautious decisions.