Bitcoin MVRV Points To Bullish Breakout Under Key Condition

Despite
some
mid-week
turbulence,
the
price
of
Bitcoin
(BTC)
rallied
to
close
the
past
week
on
a
positive
note,
with
an
overall
price
gain
of
4.07%
according
to
data
from
CoinMarketCap.

This
positive
price
performance
allowed
BTC
to
maintain
its
upward
trajectory
from
the
previous
week
when
it
crossed
above
the
$60,000
price
mark.
However,
amidst
these
price
gains,
it
remains
widely
uncertain
if
the
crypto
market
leader
has
now
entered
a
bullish
trend.

Related
Reading:
Bitcoin
Bull
Run
Begins:
Expert
Points
To
Massive
Upside
Potential
In
Coming
Months

Bitcoin
MVRV
Movement
Key
To
Bull
Run,
Analyst
Says

On
Friday,
popular
crypto
analyst
Ali
Martinez
shared
a
market
condition
that
would
signal
BTC’s
return
to
a
bullish
phase.
Over
the
last
two
weeks,
the
premier
cryptocurrency
has
gained
by
over
23%
moving
from
around
$52,800
to
a
peak
price
of
$64,041. 

Albeit,
Martinez
postulates
that
the
Bitcoin
Market
Value
to
Realized
Value
(MVRV)
ratio
needs
to
close
above
its
90-day
moving
average
to
ascertain
a
bullish
trend
following
weeks
of
sideways
movement
in
July
and
August.

Generally,
the
MVRV
ratio
is
used
to
assess
the
Bitcoin
market
trend
with
a
high
ratio
indicating
a
potential
overvaluation
of
the
asset
and
a
low
ratio
signaling
undervaluation.

When
Bitcoin’s
MVRV
crosses
below
its
90-day
moving
average
i.e.
the
average
MVRV
over
this
period,
it
indicates
the
asset
is
in
a
correction
or
bearish
phase
with
investors
likely
holding
unrealized
losses,
which
could
soon
generate
a
negative
sentiment.

In
contrast,
when
the
MVRV
moves
above
its
90-day
moving
average,
it
signals
bullish
momentum
as
Bitcoin’s
market
value
rises
above
historical
averages.

Ali
Martinez
has
postulated
the
latter
condition
must
occur
to
stamp
Bitcoin’s
bullish
transition
despite
recent
market
gains.
If
this
scenario
unfolds,
BTC
could
surge
to
as
high
as
$68,000-$70,000,
where
its
next
significant
resistance
level
lies.
In
that
instance,
the
leading
cryptocurrency
could
likely
record
an
overall
positive
performance
in
September,
a
month
known
for
bearish
returns.

New
$2
Billion
BTC
Futures
Contract
Risks
Potential
Long
Squeeze

In
other
news,
Bitcoin
traders
have
opened
about
$2
billion
in
futures
contracts
over
the
last
48
hours
following
the
asset’s
recent
price
surge.
While
this
development
signifies
high
market
interest
in
Bitcoin,
it
also
represents
a
significant
rise
in
leveraged
positions.

Ali
Martinez
states
that
this
situation
presents
long-squeeze
risk
i.e.
if
the
price
of
BTC
drops,
these
trader’s
positions
may
be
forcefully
liquidated
resulting
in
downward
pressure
on
Bitcoin’s
price.

At
the
time
of
writing,
BTC
continues
to
trade
at
$62,875
with
a
1.59%
loss
in
the
past
day.
Meanwhile,
the
asset’s
daily
trading
volume
is
down
by
16.75%
and
valued
at
$36.4
billion.

Featured
image
from
The
Motley
Fool,
chart
from
Tradingview