According to data from CoinMarketCap, Bitcoin is currently hovering around $62,000, with no significant movement in the past day. Notably, the leading cryptocurrency has entered a minor state of consolidation since the small gains posted on Friday. However, for long-term traders, Bitcoin has remained in a range-bound move until March. And while many investors have high hopes for a bullish breakout in the fourth quarter of 2024, certain market conditions must be met.
Related reading: Bitcoin Futures Liquidation Forms a Local Price Bottom – Is a Return to $65,000 Inevitable?
Bitcoin MVRV, CQ Bull & Bear Indicators Show Market Unrest
In one Quicktake post On CryptoQuant, an analyst with username burakkesmeci shares that the Bitcoin market is currently poised for major price movements. Based on the MVRV ratio and the CQ Bull & Bear metric, burakkesmeci notes that Bitcoin investors are currently showing a significant level of market anticipation.
For context, the MVRV ratio compares Bitcoin’s current price to its realized value, that is, the price at which the asset last moved up the chain. It is generally used to indicate whether Bitcoin is undervalued or overvalued relative to its realized value.
When the MVRV ratio crosses the 365-day Simple Moving Average (SMA 365), it indicates a bullish trend as investors are seeing gains in their assets since the beginning of the year. However, Burakkesmeci notes that Bitcoin’s MVRV is currently hovering just below the SMA 365 (2.03) at 1.90 since July, indicating that the BTC market remains in a stable position waiting for a breakout.
The analyst has also observed a similar pattern in the CQ Bull & Bear indicator, which measures recent price action versus longer-term price movements. According to Burrakesmeci, the CQ Bull & Bear metric has been hovering slightly below the SMA 365 (0.46) since August, reinforcing the idea that the Bitcoin market is in a holding pattern.
Factors That Will Cause a Bitcoin Rally
For Bitcoin to experience a bullish breakout from its current position, burakkesmeci highlights certain events that must occur. First, he notes that the Federal Reserve should fully engage in a rate-cutting cycle, gradually lowering rates over time. Interestingly, after a 50 basis point cut in September, market experts are tipping the Fed to cut another 25% at their next FOMC meeting in November.
Another bullish factor highlighted by burakkesmeci is an upcoming quantitative easing, which will see the US government inject liquidity into the economy. It is expected that higher liquidity will allow individuals to explore risky investments such as Bitcoin.
At the time of writing, Bitcoin is trading at $62,009 with a loss of 0.02% in the last 24 hours. Meanwhile, the asset’s daily trading volume has fallen by 53.80% and is valued at $12.97 billion.