Analysts point out that the bull flag pattern indicates that Bitcoin may soon reverse its downward trend in June. The MVRV ratio and the stablecoin ratio on exchanges provide key insights into the Bitcoin market conditions.
The flagship cryptocurrency Bitcoin (BTC) has shown signs that its recent downward trend may be reversing, sparking discussions among market analysts and investors.
After a challenging month, the price of Bitcoin dropped to a low of $58,000 earlier this week before experiencing a mild recovery, trading at around $61,516 at the time of writing.
This recovery includes a brief surge earlier today that broke through the $62,000 mark, signaling to some experts that a more significant breakthrough may be on the horizon.
Renowned market analyst Rekt Capital even suggests that the downward trend that persisted in June may soon come to an end, stimulated by a new emerging pattern in Bitcoin’s daily trading data.
Bitcoin Bull Flag Emerges
Rekt Capital notes that an early bull market pattern appears to be forming in the daily price chart. If this pattern is fully realized, it may indicate that Bitcoin is ready to face the challenge and may break free from its long-standing downward trend.
Traders are closely monitoring these technical formations, looking for signs that the current price trend may transform into a significant upward trend.
Rekt Capital notes, “Let’s see if the current price action will continue to form this small early bull market as seen in the Daily Mail.”
In addition, Rekt Capital recently revealed that the recent pullback in Bitcoin’s price is approaching the common 22% pullback seen in various market cycles. This adjustment initially received a positive response and is related to the previous all-time high support level.
Rekt Capital emphasizes the importance of Bitcoin’s price remaining above the lower limit of this pattern on the weekly chart to maintain this critical support level, although a brief drop below this level is considered tolerable.
Are there signs of a bull market breakthrough?
Although Rekt Capital has conducted optimistic technical analysis, it is crucial to consider core market indicators for Bitcoin to understand whether the cryptocurrency is truly ready for a bull market breakthrough. One of these indicators is the MVRV ratio, which is currently at 2.01.
The market value to realized value (MVRV) ratio compares Bitcoin’s market value to its realized value to determine whether the asset is undervalued or overvalued compared to historical price standards.
A ratio above 2.0 usually indicates that Bitcoin is in an area where selling pressure may begin to appear, as holders may start to consider profits attractive enough to liquidate some of their holdings.
In addition, the stablecoin ratio on exchanges has surged by 2.33%, currently at 8.22. This indicator compares the total supply of stablecoins held by exchanges to Bitcoin reserves and can indicate whether there is potential buying power to push up prices.
Higher ratios suggest that traders may be ready to convert stablecoins into Bitcoin, which could drive up prices.
However, as recently reported by AMBCrypto, there are still disagreements in the cryptocurrency market, with other well-known analysts such as Willy Woo expressing caution and pointing out that Bitcoin bears are still in control.
