The Bitcoin price dropped below $57,000 on Thursday, August 16, marking a 7% decrease. While the cryptocurrency shows signs of recovery, a prominent analyst suggests that this recent decline may have shifted BTC into a bearish phase.
Bitcoin MVRV Drops Below 1-Year SMA – What Does It Mean?
According to popular analyst Ali Martinez, Bitcoin’s cycle has changed following the price dip. The Glassnode MVRV Momentum indicator, which tracks macro market trends, shows that the MVRV ratio falling below the 1-year SMA indicates a potential bearish trend.
When the MVRV ratio crosses the 1-year SMA, it signals a shift between bull and bear markets. A break above the SMA indicates profit for holders, while a break below suggests losses.
Chart displaying Bitcoin price and MVRV momentum indicator | Source: Ali_charts/X
Martinez notes that Bitcoin entered a bearish phase after falling below $61,500. The drop indicates that a significant amount of BTC was purchased above this level, resulting in potential profit-taking and further selling pressure.
Investors facing losses may sell, driving prices lower. This cycle of selling could strengthen the bearish momentum, leading to more asset offloading.
Bitcoin Price Overview
At present, Bitcoin hovers around $59,000 with a 2.5% increase in the last 24 hours. However, the cryptocurrency has declined by almost 3% over the week, according to CoinGecko.
Bitcoin price around $59,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
