Bitcoin is approaching a potential market cycle top by late August or early September, as the MVRV 365-day moving average nears levels historically linked to major price peaks, signaling cautious optimism for traders.
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Bitcoin’s MVRV 365DMA indicates a double-top pattern similar to 2021, suggesting a peak around late August.
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U.S.-EU trade agreement boosts market sentiment, supporting Bitcoin’s price momentum near $119,000.
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Technical indicators show consolidation with possible breakout above $120,000 or pullback to $114,000 support.
Bitcoin nears a market cycle peak as MVRV 365DMA signals overbought conditions; U.S.-EU trade deal and Fed outlook support crypto momentum. Stay informed with COINOTAG.
What Does Bitcoin’s MVRV 365DMA Signal About the Market Cycle?
Bitcoin’s MVRV 365-day moving average (MVRV 365DMA) is a key indicator showing the ratio of market price to average holder cost, currently nearing levels that historically mark market tops. This pattern closely resembles the 2021 double-top, with the second peak expected by early September, suggesting the current bullish cycle may be reaching its zenith soon.
How Does the U.S.-EU Trade Deal Influence Crypto Market Sentiment?
The recent U.S.-EU trade agreement, which reduces tariffs on European goods and involves significant energy and infrastructure investments, has positively impacted investor sentiment. This macroeconomic tailwind has helped Bitcoin regain momentum near $119,000, reflecting increased confidence in risk assets ahead of the Federal Reserve’s upcoming policy meeting.
What Are Bitcoin’s Current Technical Indicators Suggesting?
Bitcoin is consolidating just below the $120,000 psychological level, with Bollinger Bands tightening and price action holding above the 20-day moving average. The relative strength index (RSI) at around 61 indicates cooling momentum but no reversal yet. This setup allows for a potential breakout toward $125,000 or a pullback to $114,000 if key support at $117,899 fails.
Bitcoin daily chart. Credit: crypto.news
What Should Traders Consider Amid These Signals?
Given the MVRV 365DMA’s historical reliability in identifying overheated markets, traders are advised to balance optimism with risk management. The current environment suggests caution as the market approaches a potential peak, with both breakout and pullback scenarios plausible depending on macroeconomic developments and technical support levels.
Frequently Asked Questions
What is Bitcoin’s MVRV 365DMA and why is it important?
The MVRV 365DMA measures Bitcoin’s market value relative to the average cost basis of holders over the past year. It helps identify when the market is overbought or undervalued, signaling potential cycle tops or bottoms.
Will Bitcoin’s price break above $120,000 soon?
Bitcoin is currently consolidating near $119,000 with technical indicators suggesting a possible breakout above $120,000, though a pullback to $114,000 remains a risk if support fails.
Key Takeaways
- MVRV 365DMA nearing historical peak: Signals Bitcoin’s market cycle may top by late August or early September.
- Positive macroeconomic factors: U.S.-EU trade deal and Fed outlook support bullish momentum.
- Technical consolidation: Bitcoin hovers near $119,000 with potential breakout or pullback scenarios.
Conclusion
Bitcoin’s approaching market cycle peak is supported by the MVRV 365DMA indicator and favorable macroeconomic conditions. While technical signals show consolidation, traders should remain vigilant and manage risk carefully. Continued monitoring of Federal Reserve decisions and global trade developments will be crucial as the market navigates this critical phase.
