Bitcoin’s price has been making waves, climbing to $118,945, a modest 1% bump in the last 24 hours. This upward tick, though encouraging for some, comes amidst a backdrop of cautionary tales from analysts who suggest that the rally could be running on fumes. CryptoQuant’s Yonsei Dent raises a yellow flag, noting that Bitcoin could hit an inflection point by late August, reminiscent of 2021’s double-top formation that heralded a bear market.
MVRV Ratio: A Warning Signal?
Yonsei Dent is not the only one with a wary eye on the charts. His analysis pivots around the Market Value to Realized Value (MVRV) ratio, specifically its 365-day moving average. This metric, in the past, has been a reliable harbinger of market tops. Dent draws comparisons to the patterns seen in 2021, suggesting that the current cycle could mimic this double-top pattern. If history is any guide, Bitcoin might peak around September 10. However, the analyst stresses that the MVRV ratio is a lagging indicator—hinting that a trend reversal could start as early as late August. As explored in our recent coverage of Bitcoin Rally Stalls as Long-Term Holders Cash Out, the behavior of long-term holders could further influence this potential turning point.
“Let on-chain timing guide your strategy—now is the time to tighten risk management and stay nimble,” Dent advises, pointing out that the macroeconomic backdrop, including speculation on Federal Reserve interest rate cuts, might influence this potential turning point. It’s a call for vigilance rather than complacency.
Bitcoin Liquidity: Is the Well Drying Up?
Adding another layer of complexity to the narrative is CryptoQuant contributor Arab Chain, who delves into the Bitcoin Stablecoin Supply Ratio (SSR). The SSR serves as a litmus test for liquidity, comparing Bitcoin’s market cap to that of all stablecoins. Arab Chain highlights that stablecoins function as the crypto market’s fiat stand-ins, and their relative supply can signal the strength of liquidity driving the market.
The current rise in SSR suggests a scenario where Bitcoin’s price is ascending despite constrained liquidity. “A continued rise in the indicator may indicate that buying momentum may weaken in the future due to low liquidity,” Arab Chain notes. If stablecoin reserves don’t see substantial growth soon, Bitcoin’s rally might falter against these liquidity limitations. This aligns with insights from Bitcoin price drop to $114K possible as BTC whales take profits, where large holders’ actions are seen as a potential catalyst for price adjustments.
A Market at a Crossroads
The juxtaposition of these analyses paints a picture of a market on the edge—enthusiastic yet cautious. On one hand, Bitcoin’s recent climb hints at renewed interest, but the underpinning metrics tell a story of potential caution. The MVRV ratio and SSR both serve as critical barometers for those in the crypto space, offering insights into the market’s current strength and future trajectory.
While the upward momentum in Bitcoin’s price brings a glimmer of optimism, the broader market dynamics and historical precedents urge a tempered approach. The echoes of 2021’s double-top pattern linger, raising questions about whether the market is poised for a repeat performance.
As we edge closer to late August, the crypto community will be watching closely. Will Bitcoin defy the odds and continue its ascent, or are we facing a turning point that could redefine the current bull cycle? The answers remain elusive, but one thing is clear: the coming weeks will be pivotal.
In the ever-volatile world of cryptocurrency, where fortunes can shift in the blink of an eye, these analyses remind us of the importance of staying informed and agile. As always, the market will have the final word.
Source
This article is based on: Bitcoin’s Rally Might Be Running on Fumes, Analyst Warns of August Turning Point
Further Reading
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- Bitcoin is rallying on US deficit concerns, not hype: Analyst
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
