Bitcoin Bullish Case Faces Key Test as Valuation Indicator Reclaims Annual Average

What to Know

• CryptoQuant analyst Trdaer_Gemini maintains a long-term bullish Bitcoin outlook while its MVRV Ratio Z-Score holds above its 365-day moving average.
• Bitcoin’s valuation indicator has recovered from depressed levels, although its declining annual average limits confirmation of a broader trend reversal.
• A sustained Z-Score breakdown below annual support, followed by failed recovery attempts, would weaken the analyst’s bullish assessment of Bitcoin.

CryptoQuant analyst Trdaer_Gemini maintains a bullish Bitcoin outlook, identifying annual valuation support as the condition that could preserve further upside. According to Trdaer_Gemini, Bitcoin’s MVRV Ratio Z-Score remains constructive while it holds above its 365-day moving average.

Trdaer_Gemini’s bullish outlook allows for short-term corrections as long as the Z-Score stays above its 365-day average. Bitcoin’s MVRV Ratio Z-Score has recovered from depressed levels and moved above that line, meeting the condition underpinning his assessment.

However, the indicator and its annual average remain below zero, while the average still slopes downward. This means the indicator has improved relative to the previous year’s average, but the annual trend has not turned upward.

The analyst draws on historical periods when the Z-Score crossed above its annual average and subsequently held that level during pullbacks. Those rebounds helped preserve the bullish pattern, explaining why he considers support holding more important than avoiding every price correction.

Nevertheless, previous crossings also produced reversals, so the latest move does not guarantee a sustained Bitcoin rally. His outlook would weaken if the Z-Score fell below the average and failed to recover above it.

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How the Annual Average Helps Assess Bitcoin’s Valuation Momentum

Understanding that relationship begins with MVRV, which compares Bitcoin’s market capitalization with its realized capitalization to assess relative valuation. Realized capitalization values coins using their prices when they previously moved on-chain, providing an approximation of the network’s cost basis.

However, those movements do not always represent purchases, so the measure cannot precisely establish what every investor paid. A Z-Score adds statistical context, although the analyst’s post does not disclose the complete calculation method for this particular indicator.

Consequently, its negative readings alone cannot establish that Bitcoin trades below realized value or that the average holder faces losses. Trdaer_Gemini instead evaluates whether the indicator remains stronger than its annual average, which forms the central reference for his outlook.

Source: CryptoQuant

Under that framework, maintaining support preserves his favorable assessment even when Bitcoin’s price experiences temporary declines. Moreover, this average tracks the valuation indicator, meaning it does not identify a specific dollar-denominated floor for Bitcoin’s trading price.

Sustained Loss of Support Would Challenge the Bullish Case

Because his assessment rests on that indicator relationship, a price correction alone would not automatically invalidate the bullish interpretation. A more meaningful warning would emerge if the Z-Score decisively fell below its annual average and failed to reclaim it.

Trdaer_Gemini identifies that combination as evidence that the broader bullish valuation structure could be weakening beyond an ordinary pullback. However, he provides no numerical breakdown threshold or specified duration, leaving the distinction between temporary weakness and sustained deterioration qualitative.

His analysis also offers no price target or rally timetable, keeping the outlook tied to support holding rather than projected gains. Trdaer_Gemini’s bullish assessment therefore remains conditional, with the annual average separating a manageable correction from a potentially deeper valuation breakdown.

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