According to data from CoinMarketCap, Bitcoin is currently hovering around $62,000 with no significant movement in the previous day. Notably, the top cryptocurrency was caught in a minor consolidation after the small gains recorded on Friday. However, for long-term traders, Bitcoin continued to maintain a range-bound move through March. And while many investors are expecting a strong fourth quarter of 2024, certain market conditions must be met.
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Bitcoin MVRV, CQ bull and bear indicators show market instability.
An analyst using the username burakkesmeci shared in a Quicktake post on CryptoQuant that the Bitcoin market is currently bracing for a major price move. burakkesmeci points out that Bitcoin investors are currently showing a significant level of market expectations based on the MVRV ratio and CQ Bull & Bear indicator.
For context, the MVRV ratio compares the current price of Bitcoin to its realized value, i.e. the price at which the asset last moved on the chain. It is commonly used to indicate whether Bitcoin is undervalued or overvalued relative to its realized value.
When the MVRV ratio exceeds the 365-day simple moving average (SMA 365), it indicates a bullish trend as investors are looking at annual capital gains. However, burakkesmeci points out that Bitcoin’s MVRV is currently at 1.90, hovering just below the SMA of 365 (2.03) since July, showing that the BTC market is in a stable position awaiting a breakout.
Analysts have also observed a similar pattern in the CQ Bull & Bear indicator, which measures recent price movements relative to longer-term price movements. According to burrakesmeci, the CQ Bull & Bear indicator has been oscillating slightly below the SMA 365 (0.46) since August, enforcing the notion that the Bitcoin market is in a holding pattern.
Factors that will trigger a Bitcoin rally
For Bitcoin to be strong from its current holdings, burakkesmeci highlights certain events that must occur. First, he points out that the Fed should fully engage in a rate-cutting cycle, gradually lowering rates over time. Interestingly, after the 50bp cut in September, market experts are suggesting that the Fed implement an additional 25% cut at the next FOMC meeting in November.
Another optimistic factor highlighted by burakkesmeci is the impending quantitative easing by the US government, which will inject liquidity into the economy. It is expected that higher liquidity will allow individuals to explore riskier investments such as Bitcoin.
As of this writing, Bitcoin is trading at $62,009, having lost 0.02% in the last 24 hours. Meanwhile, the asset’s daily trading volume decreased by 53.80% and its value was $12.97 billion.