Key Takeaways
Bitcoin’s MVRV below SMA365 highlights fragility despite bullish macro expectations. Meanwhile, rising Open Interest and modest long bias point toward possible breakout potential.
Since mid-2024, Bitcoin’s [BTC] MVRV ratio has displayed unusual behavior, dipping below its SMA365 multiple times, a shift from historical bull-cycle norms.
Traditionally, MVRV remains above SMA365 during strong uptrends, signaling solid long-term holder profits.
However, the ratio’s recent weakness raises doubts about the durability of Bitcoin’s current cycle.
While Fed rate cuts later in 2025 could provide macro support, the on-chain picture shows growing fragility.
This divergence underscores the importance of monitoring whether Bitcoin can climb back above SMA365 to confirm strength before the year ends.
On-chain and CEX volume divergence sparks liquidity concerns
Trading volume patterns highlight a rare imbalance between on-chain and exchange activity. On-chain volumes recently surged to $62 billion, significantly outpacing the $41 billion seen across CEX Spot and Futures.
While this suggests robust network activity, the broader trend reveals declining volumes during price growth.
Such negative divergence often signals thin liquidity, making rallies more vulnerable to sudden reversals. Historically, sustained bull markets have required increasing volume support.
Consequently, the current mismatch raises questions about whether Bitcoin’s momentum can continue without renewed participation from centralized exchange traders.
Puell Multiple reflects miner stress on market dynamics
The Puell Multiple has dropped nearly 15% to around 1.22, at press time, reflecting reduced miner revenue compared to historical averages.
This metric traditionally highlights points where miners face profitability challenges, which often leads to selling pressure.
The decline shows miners may offload holdings to cover operational costs, potentially creating headwinds for price stability.
However, values above 1.0 remain within neutral territory, suggesting stress is present but not extreme.
Therefore, while miners contribute to near-term selling, the indicator does not yet point toward a critical capitulation phase for Bitcoin.
Open Interest climbs as traders position for volatility
Futures activity shows clear signs of heightened speculative appetite, with Open Interest (OI) rising 2.50% to $86.05 billion, as of writing.
This expansion reflects an influx of leveraged positions, signaling traders are gearing up for larger price swings.
With long positions slightly dominant at 53.23%, there is modest bullish sentiment, though not overwhelmingly so.
Importantly, elevated OI often precedes increased volatility, as both sides compete to defend key levels.
However, if momentum weakens, cascading liquidations could amplify downside moves, reinforcing the mixed picture painted by on-chain and derivatives data.
Can Bitcoin overcome these mixed signals?
Bitcoin can overcome the mixed signals, but only if volumes strengthen and MVRV climbs above SMA365 soon.
Despite miner stress and liquidity concerns, rising OI and supportive macro policy tilt the balance toward continuation.
Therefore, the market setup favors another breakout rather than extended consolidation, provided buyers defend critical levels.
