Bitcoin News Today: Bitcoin's "Death Cross" Signals Warning—Is a Bull Market Breakdown Imminent?

Bitcoin’s valuation metrics have sparked renewed debate about the cryptocurrency’s potential for a cyclical top, as key on-chain indicators signal signs of market exhaustion and shifting momentum. The Market Value to Realized Value (MVRV) ratio, a widely followed indicator that assesses whether Bitcoin is overvalued, recently formed a “death cross,” a bearish signal historically associated with major corrections. According to CryptoQuant analyst Yonsei_dent, the 30-day moving average of the MVRV indicator crossed below its 365-day moving average, indicating a reversal in bullish momentum. This pattern last appeared in 2021, before the market entered a bear phase that saw Bitcoin drop from nearly $69,000 to $15,500 in 2022.

The MVRV death cross is interpreted by many analysts as a macro-level warning sign of a potential trend reversal. Ali Martinez, a prominent crypto analyst on X, highlighted the bearish implications of the crossover, noting that it aligns with historical patterns that have preceded major tops. If the trend continues, some forecasts suggest Bitcoin could experience a prolonged correction, with short-term targets around $105,000 and possibly as low as $60,000 should a broader bear market take hold. The timing of the signal also coincides with Bitcoin’s recent all-time high of $124,500, raising questions about the sustainability of the current bull run.

However, not all on-chain data points are bearish. The MVRV Z-Score, another valuation indicator, remains significantly below levels seen at past market peaks. Historically, a Z-Score between 7 and 9 has been associated with cyclical tops, with readings above 9 signaling extreme overvaluation and a high likelihood of a sell-off. As of now, the metric is hovering around 2, suggesting that the market is not yet in overextended territory. Analyst Stockmoney Lizards noted that the current environment differs from previous tops, where investors were sitting on large unrealized profits and were more prone to selling. This suggests that Bitcoin may still have room to rise before reaching a new peak.

Bitcoin’s price has shown signs of weakness in recent weeks, dropping to a weekly low of $107,900 after briefly breaching the $124,000 all-time high in August. Analysts have pointed to technical indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) to support the view that a bearish shift is under way. Ali Martinez described the pattern as a “macro trend reversal,” echoing the conditions that preceded the 2021 peak. If the trend continues, the next key support levels are expected to be around $104,500, $97,000, and potentially $59,720, depending on how the market evolves over the coming weeks.

Despite the bearish signals, some analysts remain cautiously optimistic. The CoinGlass bull market peak signals, a composite of 30 on-chain metrics, still show no signs of overheating. Additionally, Bitcoin’s dominance in the broader crypto market remains strong, and the 200-day exponential moving average is still intact at around $104,000. These factors suggest that while a correction is possible, it may not necessarily mark the end of the current cycle. Some traders have even projected that Bitcoin could reach a new all-time high of $260,000 if the bullish megaphone pattern continues to play out as expected.

In summary, the recent bearish signals in Bitcoin’s valuation metrics have reignited discussions about a potential macro reversal in the market. While the MVRV death cross and bearish divergence on the RSI highlight the risks of a short-term correction, other on-chain data indicates that the market is not yet in extreme overvaluation. Investors are advised to monitor key technical levels and broader market sentiment as the crypto asset navigates this critical juncture.

Source:

[1] Bitcoin valuation indicator hints at macro top as 'death cross' appears (https://cointelegraph.com/news/bitcoin-valuation-indicator-hints-at-macro-top-as-death-cross-appears)

[2] Is The Bitcoin Rally Over? Analyst Forecasts Drop To ... (https://www.mitrade.com/insights/news/live-news/article-3-1082056-20250830)

[3] Crypto Trader Issues Urgent Bitcoin Alert, Says BTC ... (https://dailyhodl.com/2025/08/30/crypto-trader-issues-urgent-bitcoin-alert-says-btc-flashing-signal-that-preceded-2021-cycle-top/)