Key Points
- Bitcoin’s MVRV ratio is nearing a critical breakout, with leverage across futures markets rapidly increasing.
- A decisive move above $95,783 could unlock rapid upside, but heavy liquidations still pose a threat.
Bitcoin’s [BTC] MVRV ratio recently hovered at 2.13, just below its critical 365-day Simple Moving Average (SMA365) of 2.14. This is a historically decisive pivot for mid-term bullish reversals.
However, Bitcoin must achieve a confirmed weekly close above the SMA365 to validate the potential trend shift. Hence, market participants are closely monitoring this crossover as it could mark the beginning of a stronger recovery phase.
Increasing Speculation in Bitcoin Market
Open Interest across Bitcoin Futures markets surged by 20% in the past 20 days, now exceeding $26 billion. This signals an aggressive buildup in speculative positioning.
Furthermore, the Estimated Leverage Ratio has risen by 0.99%, indicating that traders are increasingly relying on margin to amplify their bets. However, while rising leverage often fuels stronger short-term price moves, it simultaneously increases the probability of volatile liquidation cascades if sentiment abruptly shifts.
Bitcoin Price Structure
Bitcoin recently broke out of a falling wedge formation, typically a bullish technical signal. However, at press time, Bitcoin traded at $94,036, slipping 0.71% over 24 hours.
This minor pullback highlights that sellers are still defending the $95,783 resistance zone aggressively. Therefore, Bitcoin needs a clean daily close above this level to validate the bullish setup and aim for further gains.
Conversely, failure to breach this resistance could see the price slide back toward the $83,462 support level, where buyers previously showed strong interest.
Bitcoin’s Stock-to-Flow (S2F) ratio, measuring scarcity, declined 22.22%, adding short-term pressure to the traditional bullish model. However, the decline does not entirely undermine Bitcoin’s long-term fundamentals.
The liquidation map shows dense, long liquidation clusters for Bitcoin between $93,000 and $94,000, creating a critical support zone. A sustained dip below these levels could trigger a cascade of liquidations, potentially driving the price down to $91,000.
Conversely, if Bitcoin breaks and holds above $95,783, the liquidation density thins significantly, paving the way for a rapid upward move with minimal resistance. This reduced overhead liquidation pressure strengthens the bullish outlook, provided momentum picks up again.
Bitcoin is at a critical decision point. The rising leverage, MVRV ratio positioning, and wedge breakout all suggest a bullish continuation if $95,783 resistance is flipped into support. However, failure to do so will likely expose Bitcoin to sharp corrections toward lower liquidity zones.
