Despite facing some mid-week turbulence, Bitcoin (BTC) managed to close the past week on a positive note. The cryptocurrency achieved an overall price gain of 4.07%, according to data from CoinMarketCap. This upward movement allowed BTC to continue its positive trajectory from the previous week when it surpassed the $60,000 price mark. However, it remains uncertain whether the leading cryptocurrency has entered a definitive bullish trend.
Bitcoin MVRV Movement Key to Bull Run, Analyst Says
On Friday, renowned crypto analyst Ali Martinez highlighted a market condition that could signal the return of BTC to a bullish phase. Over the past two weeks, Bitcoin has seen a remarkable gain of over 23%, rising from approximately $52,800 to a peak price of $64,041.
According to Martinez, the Bitcoin Market Value to Realized Value (MVRV) ratio needs to close above its 90-day moving average to confirm a bullish trend. The MVRV ratio is a critical metric used to evaluate the Bitcoin market trend. A high ratio generally indicates potential overvaluation, while a low ratio suggests undervaluation.
When Bitcoin’s MVRV crosses below its 90-day moving average, it indicates a bearish phase where investors might be holding unrealized losses, which could lead to negative sentiment in the market. Conversely, when the MVRV moves above its 90-day moving average, it signals bullish momentum as Bitcoin’s market value exceeds historical averages.
Martinez asserts that for Bitcoin to confirm its bullish transition, the MVRV must exceed the 90-day moving average. Should this scenario unfold, BTC could potentially surge to between $68,000 and $70,000, encountering its next significant resistance level. If this happens, Bitcoin could likely record a positive performance in September, a month historically known for bearish returns.
New $2 Billion BTC Futures Contract Risks Potential Long Squeeze
In recent developments, Bitcoin traders have opened approximately $2 billion in futures contracts over the last 48 hours following the recent price surge. While this signifies heightened market interest in Bitcoin, it also presents a substantial increase in leveraged positions. Ali Martinez points out that this situation poses a risk of a long squeeze. If BTC’s price drops, these leveraged positions could be forcefully liquidated, exerting downward pressure on Bitcoin’s price.
As of the time of writing, BTC is trading at $62,875, reflecting a 1.59% loss in the past day. Additionally, the asset’s daily trading volume has decreased by 16.75%, currently valued at $36.4 billion.
