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.
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