Bitcoin (BTC) Price Continues to Rise Despite Midweek TurmoilBitcoin saw a positive turnaround last week with an overall price increase of 4.07%, according to data from CoinMarketCap. This strong price performance has allowed BTC to maintain its upward trend since surpassing $60,000 last week. However, amid these price gains, it remains unclear whether the cryptocurrency market leader has now entered a bullish trend.
Related article: Bitcoin bull market begins: Experts point to potential massive upside in coming months
Bitcoin's MVRV Move is Key to Bull Market, Says Analyst
On Friday, popular crypto analyst Ali Martinez Share This is a market situation that suggests BTC may be heading back into a bull market. Over the past two weeks, the leading cryptocurrency has risen by over 23%, rising from around $52,800 to a record high of $64,041.
However, Martinez hypothesized that Bitcoin’s market cap to realized value (MVRV) ratio would need to close above its 90-day moving average to confirm a bullish trend after several weeks of sideways movement in July and August. Generally, the MVRV ratio is used to assess Bitcoin market trends, with a high ratio indicating a possible overvaluation of the asset, while a low ratio indicates that it is undervalued.
When Bitcoin’s MVRV falls below its 90-day moving average, i.e. the average MVRV for this period, it indicates that the asset is in a correction or bearish phase and investors are likely holding unrealized losses, which can quickly generate negative sentiment. In contrast, if the MVRV rises above the 90-day moving average, it would signal bullish momentum as Bitcoin’s market value would rise above its historical average.
Ali Martinez hypothesizes that the latter condition needs to occur to confirm a bullish turn for Bitcoin despite the recent market rally. If this scenario plays out, BTC could surge to $68,000-$70,000, which would be the next key resistance level. In that case, the leading cryptocurrency would likely record a positive performance overall. SeptemberA month known for bearish returns.
New $2 Billion BTC Futures Contracts Raise Risk of Potential Long Squeeze
In other news, Bitcoin traders have opened roughly $2 billion in futures contracts in the past 48 hours following the asset's recent price surge, a development that signals high market interest in Bitcoin but also represents a significant increase in leveraged positions. Ali Martinez state This situation poses a long squeeze risk, meaning that if the price of BTC falls, these traders' positions could be forced to be liquidated, putting downward pressure on Bitcoin's price.
At the time of writing, BTC continues to trade at $62,875, down 1.59% from the previous day, while the asset’s daily trading volume is down 16.75% to $36.4 billion in value.
Featured image from The Motley Fool, chart from Tradingview
