• Bitcoin’s MVRV ratio at risk of Death Cross.
• Bitcoin reserves on all exchanges are at historic lows.

Bitcoin [BTC] reached a new all-time high in 2024, drawing interest from institutions, governments, and large investors. Bitcoin ETFs gained popularity, with institutional ownership rising to 27%.

However, concerns are emerging as Bitcoin’s MVRV ratio indicator is at risk of a Death Cross, which could signal a bearish trend.

In past cycles, a Death Cross in MVRV momentum led to a prolonged bearish phase. It is essential to watch if the 30-day moving average continues to decline.

A further drop could mean bearish outcomes, but if the 30 DMA finds support at the 365 DMA and starts to rise, it might indicate a potential price increase for BTC.

Bitcoin and gold correlation

Currently, the Bitcoin-to-Gold ratio stands at 23.4, below its 2021 high. The ratio could drop below 20, signaling bearish trends for Bitcoin.

However, if it advances above 32.5, it may indicate a bullish trend in the BTC-Gold correlation. Bitcoin recently bounced off its Golden Ratio Multiplier 350 DMA, a bullish sign.

Still, market sentiment remains uncertain, as the past five monthly candles have traded between $50k – $70K but the key question is if Bitcoin will retest the $51K level or climb back toward the 1.6x level at $82K.

Reserves and institutional demand

Bitcoin reserves on all exchanges are at historic lows, while institutional demand is at an all-time high.

This scenario raises the possibility of a supply squeeze, which could cause prices to dip briefly to gather liquidity before a potential surge.

Since the BTC supply is dwindling, the demand will rise setting the market for significant price movements.

Price elasticity of demand for Bitcoin

Bitcoin’s price elasticity of demand shows that as prices rise, demand (measured by the volume of transfers) decreases, and as prices fall, demand increases.

This inverse relationship suggests that for strong demand to be stimulated, BTC price may need to drop.

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This creates a dilemma where BTC could flip bearish before experiencing a surge, driven by increased demand at lower prices.

The MVRV Death Cross and the BTC-Gold ratio needs close monitoring as the interplay between different metrics will likely shape Bitcoin’s future price.