Bitcoin News Today: Bitcoin's Weakening Pulse: A Market Imbalance Nears Breaking Point

Bitcoin's recent market dynamics have sparked growing concerns over a potential correction, primarily due to the breakdown of the MVRV (Market Value over Realized Value) ratio below the SMA365 benchmark. This technical development, often interpreted as a sign of weakening market cycles, has positioned Bitcoin near critical support levels. As of the latest data, the MVRV ratio has fallen below its 365-day Simple Moving Average, a historical signal associated with extended bearish phases and reduced market momentum. The ratio, which peaked at 2.77 in March 2024, has been forming progressively lower highs since Bitcoin reached a high of $124.4K, indicating fading bullish energy in the market [1].

The breakdown of the MVRV ratio is compounded by other on-chain indicators that suggest continued downward pressure. The Spot Taker CVD (Cumulative Volume Delta) has shown a recent tilt towards selling dominance, reflecting sustained bearish sentiment in the spot markets. Over the past 90 days, the dominance of sell-side volume has hindered potential short-term rallies, increasing the likelihood of quick rejections in the event of attempted rebounds. This selling pressure, combined with a market structure that has failed to hold an ascending trendline, has pushed Bitcoin toward the $110K support level, with further downside potentially reaching $100K if the trend persists [1].

Funding rate imbalances also contribute to the bearish bias. Leverage data from Binance shows that long positions currently hold 64.55% of the net open interest, while short positions account for just 35.45%. The resulting Long/Short ratio of 1.82 indicates a strong bullish bias among leveraged traders. However, such imbalances historically precede large liquidation events when prices slip below key thresholds. The current positioning may therefore act as a double-edged sword: while it reflects confidence in Bitcoin’s price, it also increases the risk of sharp corrections if the market experiences further selling [1].

Despite these bearish signals, the broader macroeconomic environment has provided some support. Institutional demand and ETF inflows have continued to offer a floor to Bitcoin’s price, keeping the overall cycle intact. This dynamic suggests that while the immediate technical picture may point to a correction, the structural underpinnings of the market remain intact. The question now is whether buyers will step in to defend the $110K–$108.8K support range or allow the price to break further, potentially triggering a deeper correction.

The RSI stands at 40.27, indicating that the market is approaching oversold territory. While this could signal a short-term buying opportunity, the fragile sentiment and continued Taker Sell Dominance suggest that any bounce may be short-lived. If the support levels fail, the market could see a renewed test of lower levels, potentially altering the near-term trajectory of Bitcoin. Analysts will be closely watching for signs of stabilizing demand or renewed bullish momentum in the coming sessions [1].

Source: [1] Bitcoin correction alert! MVRV breakdown points to a $100K fall (https://ambcrypto.com/bitcoin-correction-alert-mvrv-breakdown-points-to-a-100k-fall/)