Bitcoin has entered a clear consolidation phase after breaking above its all-time highs two weeks ago, and the market is now at a critical juncture. While the rally to new records fueled optimism, the momentum has since slowed, with bulls struggling to hold key support levels. Analysts warn that if buying pressure does not strengthen soon, BTC could correct below the $105,000 mark, a level many are watching as the next decisive test.
According to fresh data from CryptoQuant, the cycle and volatility-adjusted MVRV currently stands at 39%. This metric, which compares Bitcoin’s market value relative to realized value while accounting for volatility, reflects a neutral balance between risk and reward. Historically, readings near this zone suggest the market has cooled from overheated extremes and entered a consolidation period, rather than signaling either full capitulation or euphoria.
This places Bitcoin in a delicate position. On one hand, the lack of extremes provides stability, suggesting the asset is not overextended. On the other hand, it highlights a market that is searching for direction, vulnerable to swings as liquidity shifts. With volatility persisting, the coming weeks could decide whether Bitcoin stabilizes for another leg higher or slips into its first deeper correction of the cycle.
Bitcoin Market Cools As MVRV Signals Neutral Risk
According to top analyst Axel Adler, Bitcoin’s cycle and volatility-adjusted MVRV offers a clear picture of where the market currently stands. On this metric, a reading near 100% has historically aligned with overheated extremes, often signaling euphoric tops. Conversely, a reading closer to 0% tends to correspond with complete capitulation, when investors have largely exited in panic and selling pressure exhausts itself.
At present, the metric sits at 39%, placing Bitcoin in what Adler describes as a neutral risk/reward zone. This level is neither overly bullish nor outright bearish, and it implies that the market has cooled significantly from prior overheating. In other words, the explosive upward momentum that pushed BTC to fresh all-time highs two weeks ago has now transitioned into a phase of consolidation without extremes.
This neutrality brings both opportunity and uncertainty. On one side, the lack of overheated signals reduces the likelihood of an imminent crash fueled by speculative excess. On the other, the absence of a strong bullish signal means that Bitcoin lacks a clear catalyst to surge higher in the short term.
Adler notes that the coming weeks will be critical in shaping Bitcoin’s direction. If support holds and accumulation strengthens, BTC could stabilize before another push toward record levels. However, should bearish sentiment build, the market risks sliding below key levels such as $105,000, setting the stage for a deeper correction.
BTC Struggles Below Key Resistance
Bitcoin is currently trading around $108,845, showing signs of fragility after days of sustained selling pressure. The chart highlights how BTC has struggled to reclaim momentum following its rejection near $123,200, where a major resistance level continues to cap upside potential. Since mid-August, the price action has been marked by a clear downward trend, with lower highs and lower lows reinforcing bearish sentiment.
The moving averages confirm this weakness. The 50, 100, and 200-period SMAs are now stacked bearishly, with the short-term averages trending below the longer-term ones. This alignment signals continued downward momentum unless bulls manage to stage a convincing rebound. For the moment, Bitcoin’s attempts to recover have been muted, and the current bounce looks more like consolidation than the start of a new uptrend.
Key support lies just above $105,000, where buyers previously stepped in to prevent deeper losses. A decisive breakdown below this level could expose Bitcoin to further downside, possibly toward the psychological $100,000 threshold. On the other hand, reclaiming the $112K–$115K zone would be critical for shifting momentum back toward the upside.
Featured image from Dall-E, chart from TradingView
