The price of bitcoin is hovering precariously around key support levels after Monday's market freefall, when crypto majors experienced double-digit drops, followed by Tuesday's slight recovery.

"Bitcoin prices are again hovering at key support levels, with risks of this correction extending further according to valuation metrics," CryptoQuant analysts said.

According to Tuesday's CryptoQuant market report, the Market Value to Realized Value (MVRV) ratio, which compares the market price to the most recent average price bitcoin moved on the blockchain, has fallen below its 365-day moving average, a condition that in previous cycles has signaled an extension of price declines. The report observed that the same key support level was breached amid the COVID-19 crash in March 2020, during the …