Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin’s price has seen a period of struggle since mid-July, prompting a prominent analyst to identify a critical price level that could determine its next bullish trajectory. Despite setting a new record high around $124,120, the premier cryptocurrency has faced significant bearish pressure, briefly dipping below $112,000 before a positive reaction to US Federal Reserve Chairman Jerome Powell’s speech. Now, the focus is on whether Bitcoin can reclaim the $118,000 mark.
Recent Price Action and Analyst Insight
The cryptocurrency market leader has found it challenging to make sustained upward movement since reaching its former all-time high of approximately $123,800 in mid-July. While a new peak was established, a robust bullish run did not materialize, leading to a significant pullback.
Over the past week, Bitcoin succumbed to bearish pressure, falling beneath the $112,000 level on Thursday, August 21. However, the market, including Bitcoin, responded positively to the speech by US Federal Reserve Chairman Jerome Powell on Friday, August 22, providing a temporary reprieve.
Following these movements, crypto analyst Ali Martinez took to the social media platform X on August 23 to highlight a crucial price point. Martinez pinpointed $118,000 as the most important level for Bitcoin’s immediate future, suggesting that a swift reclaim of this price is essential for a return to bullish momentum.
The Glassnode MVRV Momentum Indicator
Martinez’s analysis hinges on the Glassnode MVRV (Market Value to Realized Value) Momentum indicator, a metric designed to identify macro market trends. This indicator combines the MVRV ratio with its 70-day simple moving average (SMA).
Traditionally, when the MVRV ratio breaks above its 70-day SMA, it signals a transition into a bull market. Conversely, a break below the simple moving average often indicates a shift towards a bearish phase.
Strong upward breaks typically imply that a large volume of Bitcoin was acquired below the current price, meaning holders are in profit. In contrast, a strong breach below the moving average suggests that significant amounts of BTC were purchased above the current price, indicating holders are currently at a loss.
According to Martinez, the Bitcoin price is currently experiencing a trend shift, with the 70-day SMA situated around the $118,000 region. For Bitcoin to regain bullish momentum, the MVRV ratio needs to decisively break above this moving average.
Current Bitcoin Valuation
As of this report, Bitcoin’s price stands at approximately $116,217, reflecting an increase of over 2% in the last 24 hours. Despite this recent uptick, the flagship cryptocurrency remains down by more than 1% on the weekly timeframe, underscoring the ongoing volatility and the importance of the $118,000 level.
The immediate future of Bitcoin appears to be largely tied to its ability to reclaim the $118,000 price level, as indicated by the MVRV Momentum metric. This key threshold will be critical in determining whether the cryptocurrency can successfully shift from its recent struggles back into a sustained bullish trend.
