Recently, the Bitcoin market value to realized value (MVRV) ratio has once again slipped below its 365-day simple moving average (SMA365), raising questions about whether the current cycle is deviating from historical norms. Analysts note that the Bitcoin market is transitioning into a bullish cycle characterized by gradual corrections.
Bitcoin and Parabolic Growth
Traditionally, during bullish markets, MVRV tends to remain above this level except during extreme 'Black Swan' events. This trend largely held until 2024, when the introduction of US spot Bitcoin ETFs and a surge in institutional inflows appeared to change market dynamics. This year, MVRV dipped below SMA365 twice but quickly rebounded, coinciding with Bitcoin reaching new all-time highs.
Signals from Derivatives and Their Impact
A similar trend is observed across derivatives as activity in this sector takes center stage in the Bitcoin market. Data from Glassnode indicates that futures and options are helping absorb selling pressure while guiding price action. For instance, the Volume Delta Bias, which tracks deviations of cumulative volume delta from its 90-day median, rebounded at $108K, indicating broad seller fatigue across platforms like Binance and Bybit.
Future Prices of Bitcoin and Market Predictions
The critical level to hold is $114,000. If Bitcoin manages to maintain this level, it could affirm the strength of this bullish phase. Conversely, a drop below this level risks renewed stress for short-term holders and potentially exposes downside targets around $108,000 and $93,000.
Overall, the Bitcoin market shows new signs of a bullish cycle that may differ from previous parabolic rallies, warranting close monitoring of changes in MVRV and market conditions.
