Although trends in the cryptocurrency market have started to signal better times, the pain may not yet be over for the industry’s representative asset, Bitcoin (BTC), which has recently experienced a death cross in its key indicator.
Indeed, Bitcoin’s market value to realized value (MVRV) Momentum indicator has demonstrated a death cross, signaling a macro momentum reversal from positive to negative, according to the observations shared by popular crypto trading expert Ali Martinez in an X post on August 28.
Why is BTC dropping?
As the chart suggests, the MVRV momentum has just flipped negative, which has traditionally signaled weakness and often tends to line up with local or extended market downturns.
In other words, Bitcoin’s price could make a rather strong turn for the worse, towards the key support levels that this expert has highlighted as standing at $104,520, $97,050, and $59,720 in another analysis he shared on his X account on August 28.
At the same time, Martinez noted another concerning indicator for the short-term price performance of the flagship decentralized finance (DeFi) asset. Specifically, the Bitcoin supply in profit has signaled a possible shift into a downtrend phase, as the analyst pointed out in the chart.
Notably, the chart shows a sharp decline in supply in profit, which means that a lot of Bitcoin holders are no longer in profit, a signal that has historically often marked the beginnings of corrections or bear phases.
For the time being, the maiden crypto asset is changing hands at the price of $113,196.67, which suggests an increase of 2.35% in the last 24 hours, as it fights to overcome the 0.48% decline from across the previous seven days, and the drop of 4.71% on its monthly chart, per the latest data.
Earlier, Martinez noticed that Bitcoin was at a crossroads, “breaking out of its channel,” and that its downward breakout could send it to $106,000 and then $100,000, as bears were fighting bulls over the $115,000 level, closing below which would mean that bears gain the edge.
What do you think?
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