Bitcoin, the leading cryptocurrency, approaches a possible golden cross with the MVRV and 180-day SMA that may indicate an ongoing bull run. Despite the bullish potential, declining futures open interest and rising demand for downside protection signal market caution. Traders remain watchful amidst uncertain conditions impacting BTC’s price trajectory.

Bitcoin (BTC), recognized as the leading cryptocurrency by market capitalization, is nearing a critical moment that could significantly impact bullish trends. According to Ali, a noted crypto analyst, traders should monitor the MVRV and 180-day Simple Moving Average (SMA) closely, as a “golden cross” may signal the continuation of the current bull run. “Watch for the MVRV and 180-day SMA to flash a golden cross to signal the continuation of the Bitcoin (BTC) bull run,” Ali stated.

A golden cross occurs when a short-term moving average surpasses a long-term moving average, indicating a potential upward momentum in prices. Currently, Bitcoin (BTC) has seen a decline of 1.74% within the last 24 hours, trading at approximately $83,359 due to profit-taking following gains on Thursday. Analysts point to the $80,000 mark as a crucial support level for Bitcoin to sustain its upward trajectory.

While technical indicators offer a measure of optimism, it is essential to consider broader market conditions and macroeconomic influences that could affect Bitcoin’s price direction in the near term. The derivatives market, however, illustrates a more cautious sentiment among traders. Recent data from Glassnode reveals that futures open interest plummeted from $57 billion to $37 billion, marking a 35% decline since Bitcoin’s all-time high. This decline suggests reduced speculative activities and a shift towards more conservative positions.

Moreover, Bitcoin options markets display an uptick in demand for downside protection, as evidenced by the Volatility Smile, which indicates that put options are trading at a higher premium relative to call options. This reflects a risk-averse market approach as investors seek to safeguard against potential downside risks. The Options 25 Delta Skew also corroborates this worrying trend, demonstrating that short-term puts are becoming increasingly expensive compared to calls, further emphasizing the demand for hedging in a fluctuating market. The heightened costs associated with downside protection reveal a pervasive caution among market participants regarding Bitcoin’s price movements.

In summary, Bitcoin is approaching a pivotal moment as it nears a potential golden cross between the MVRV and 180-day SMA, which could support bullish market sentiment. However, a cautious outlook prevails among traders, as indicated by the significant drop in futures open interest and increased demand for hedging through options. This combination of technical indicators and market behavior underscores the delicate balance of optimism and caution present in the current cryptocurrency environment.

Original Source: u.today

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