Bitcoin Rally Sparks Doubts As MVRV Signal Turns Bearish

• Bitcoin’s MVRV ratio diverged from price movement, raising concerns similar to the 2021 market cycle.
• On-chain signals and derivatives data suggest growing caution among traders despite recent bullish momentum.

Bitcoin’s price has soared past $111,000, setting a new record high. But behind that achievement, there is one indicator that is actually showing a different signal: the MVRV ratio. Many traders are starting to take another look at this indicator because it is considered more “honest” in measuring whether the current price is still reasonable or has started to get too high.

Bitcoin Rally Echoes 2021 as MVRV Divergence Resurfaces

On-chain analyst Yonsei_dent from CryptoQuant highlighted the emergence of a golden cross between the 30-day moving average (30DMA) and 365-day moving average (365DMA). Usually, this is a medium-term bullish signal. But strangely, after the price peak in January touched $109,000, the MVRV ratio actually fell—even though the price actually rose again in May.

At first glance, this looks like a warning that appeared in 2021. At that time, Bitcoin also printed a higher price, but the MVRV ratio failed to follow. The result? The market entered a long downturn. Now, with the pattern starting to resemble, it is natural for the same concerns to arise.

Pressure Comes from Many Directions

Not only that, CNF previously reported that the market had printed four consecutive sell signals. The decline in the UTXO ratio indicates that many long-term holders are starting to release their assets.

On-chain analyst Axel Adler interpreted this signal as a sign of an overheated market, like a body that needs to cool down after a marathon. According to him, BTC will most likely enter a lull or mild price adjustment period to absorb the previous surge in profits.

On the other hand, CoinGlass noted that activity in the Bitcoin derivatives market has dropped drastically. In the past 24 hours, trading volume has plunged 47.78% to just $49.60 billion. This is not just a number—it shows that the short-term enthusiasm for Bitcoin trading is starting to wane. Traders tend to hold back, perhaps because there is no strong trigger that can move the price higher in the near future.

Interestingly, open interest or the total value of open positions remains relatively stable. It only decreased by 0.29% to $71.16 billion. This means that even though the transaction volume has decreased, most traders have not closed their positions. They may be simply waiting—watching the wind before deciding to move further.

Meanwhile, the options market is also quiet. Trading volume dropped by 69.39%, leaving daily transactions worth $1.11 billion. In a situation like this, speculative strategies become less attractive. Many choose to take a conservative approach and tend to avoid risks.

If you look at the long/short ratio for the BTC/USDT pair on Binance, there is still a little optimism. The ratio is at 1.2109, meaning that the number of accounts holding long positions is slightly more than short. But this ratio does not indicate an excessive surge in buying enthusiasm.

Instead, this figure reflects the cautious attitude of market players—they are still cautious, not immediately stepping on the gas. Meanwhile, as of press time, BTC is trading at about $103,876.66, slightly up 0.46% over the last 24 hours.

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