Why Bitcoin may not be out of the woods just yet
- The relationship between BTC’s MVRV ratio and 30-day SMA suggested a further price decline.
- Market sentiment around Bitcoin remained bearish.
King coin Bitcoin [BTC], falling to the current crypto bloodbath, turned bearish overnight as its price declined by over 3% in the last 24 hours.
Its price had plummeted under the $40,000 mark at press time, sparking fear among investors. Alongside this, a key Bitcoin metric turned bearish as well, hinting at the possibility of a continued downfall.
Bitcoin investors are bearing losses
As per AMBCrypto’s earlier report, Bitcoin’s fear and greed index had previously gone into a neutral position.
Our analysis in the aforementioned article suggested that the possibility of BTC witnessing a further downtrend was high, especially when the coin was meandering above the $41,000 mark.
The analysis turned out to be true, as the king coin shed more of its value, a downtrend that continued well into press time.
What does the future hold?
According to CoinMarketCap, BTC was down by more than 3% in the last 24 hours. At the time of writing, the king coin was trading at $39,254.71 with a market capitalization of over $770 billion.
Meanwhile, CryptoQuant author and analyst Datascope highlighted a key point that could pose more trouble for investors.
The analyst used the relation between the MVRV (Market Value to Realized Value) ratio and its 30-day Simple Moving Average (SMA) to point out an interesting development.
Datascope noted that in instances where the MVRV ratio goes under the SMA, there could be a potential downtrend in price.
To accentuate their point, the analyst plotted the metrics in the chart above, which compared BTC’s price to its MVRV and SMA metrics.
A similar crossover occurred recently, which could be an indication that BTC’s price would go down further.
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AMBCrypto’s analysis of CryptoQuant’s data revealed a similar bearish pattern. Notably, both the Coinbase Premium and Korea Premium were in the red at press time.
This clearly meant the selling sentiment was dominant among US and Korean investors at the time of writing.