As a seasoned crypto investor with a few battle scars to show for it, I find myself cautiously optimistic about the recent price rally of Bitcoin (BTC). The 4.07% gain over the past week and the crossing above the $60,000 mark are certainly promising signs. However, as Ali Martinez’s analysis suggests, we must keep a close eye on the MVRV ratio to truly confirm a bullish trend.
Despite some bumps in the middle of the week, Bitcoin (BTC) ended the past week with a positive trend, recording a 4.07% increase as per CoinMarketCap’s data. This upward movement follows BTC surpassing the $60,000 mark the previous week. Yet, it’s still unclear whether this crypto market leader has officially started a bullish phase.
Bitcoin MVRV Movement Key To Bull Run, Analyst Says
Last Friday, well-known crypto analyst Ali Martinez posted about a market scenario indicating Bitcoin might reenter a bullish trend. In the past two weeks, the leading cryptocurrency has surged by more than 23%, climbing from approximately $52,800 to reach a high of $64,041.
Although Martinez suggests that for a bullish trend, the Bitcoin Market Value to Realized Value (MVRV) ratio must surpass its 90-day moving average, following several weeks of no clear direction in July and August. Typically, a higher MVRV ratio might imply potential overvaluation of the asset, while a lower ratio could suggest undervaluation.
When Bitcoin’s MVRV (Market Value to Realized Value) dips below its 90-day moving average, it suggests a possible correction or bearish trend, as investors might be holding onto assets with potential unrealized losses. This could lead to a negative sentiment among investors. Conversely, when the MVRV rises above its 90-day moving average, it’s a bullish sign, indicating that Bitcoin’s market value is higher than historical averages, potentially signaling a positive trend.
As a crypto investor, I’m keeping a close eye on the market trends, and while Bitcoin has shown some promising gains recently, I believe it’s crucial for a specific condition to be met for a sustained bullish transition. If this condition materializes, Bitcoin could potentially soar to heights of $68,000-$70,000, where its next significant resistance level resides. Under such circumstances, September might turn out to be a favorable month for BTC, bucking the trend of bearish returns it’s historically known for.
New $2 Billion BTC Futures Contract Risks Potential Long Squeeze
Over the past 48 hours, Bitcoin traders have initiated around $2 billion worth of futures contracts due to the asset’s recent price increase. This activity demonstrates a growing market fascination with Bitcoin and an uptick in leveraged positions. According to analyst Ali Martinez, this scenario could potentially lead to a ‘long squeeze’, meaning if the price of BTC decreases, these traders’ positions might be forcibly liquidated, which could exert downward pressure on Bitcoin’s value.
Currently, Bitcoin is being traded at approximately $62,875, showing a decrease of about 1.59% over the past 24 hours. Simultaneously, its daily trading volume has reduced by around 16.75%, amounting to roughly $36.4 billion.
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2024-09-22 02:11