Bitcoin Price At Risk? Outlook Is Bearish As MVRV, Fear And Greed Index Fall

Bitcoin price continued its consolidation as the fear and greed index remained at the neutral point and the Z score of the market value and realized value fell to a three-month low.

Bitcoin (BTC), the largest cryptocurrency by volume, remains in a tight range. At last check Saturday, the price hovered $97,600 — up 1.2%.

Why Bitcoin price has stalled

This price action is happening as investors remain on the sidelines as they wait for the next catalyst. SoSoValue data shows that American investors’ demand for spot Bitcoin ETFs has waned.

The funds had net outflows worth over $650 million in the last four days.

On-chain analyst Ali Martinez commented on the trend on Saturday,

When spot Bitcoin ETFs offload BTC, it means they are selling Bitcoin from their holdings, which can create downward price pressure, signal investor outflows, and increase market volatility.

Redemptions, institutional portfolio shifts, or fund rebalancing are likely driving the sales. If multiple ETFs sell simultaneously, it can amplify price swings, especially in low-liquidity periods.

Additionally, arbitrage traders may exploit discrepancies between ETF prices and Bitcoin’s spot price.

Who’s to blame?

Bitcoin stalled amid the ongoing geopolitical risks and potential for high interest rates for longer. Investors anticipate President Donald Trump’s tariffs will spark a trade war and cause market volatility.

It will also lead to higher inflation as companies boost prices in the U.S. Inflation data released this week showed that the headline consumer inflation data rose from 2.9% in December to 3% in January, while the core CPI moved from 3.2% to 3.3%.

Bitcoin and other risky assets underperform the market when the Federal Reserve is hawkish. In his testimony to Congress this week, Fed Chair Jerome Powell hinted that the central bank would hold steady until inflation starts falling.

Investors are jittery

The closely watched fear and greed index has dropped from the extreme greed area of 90 in 2024 to the fear zone of 40.

Further, the Z score of the MVRV (Market Value to Realized Value) indicator has dropped to 2.49, from the year-to-date high of 3. The MVRV indicator is a popular tool used to measure the valuation of a crypto coin. It does that by subtracting the realized market value from the circulating market value and then standardizing it. An MVRV figure of less than 3.5 indicates that a crypto coin is undervalued. 

Historically, a drop in the fear and greed index, MVRV, and futures open interest signals potential accumulation by smart money investors.

BTC price technical analysis: Bitcoin needs to clear $108,440

The daily chart shows that the price of Bitcoin has remained below $100,000 in the past few days. It has also remained in a tight range in the past two months. 

Bitcoin has dropped below the 50-day Exponential Moving Average, a bearish sign. Additionally, it has formed a double-top chart pattern at $108,440. 

Therefore, Bitcoin’s outlook is bearish as long as it is below the double-top level. The bearish outlook will become invalid if it moves above $108,440, as this will invalidate the double-top point. 

A drop below the neckline point at $89,055 will point to more downside, with the next support level being at $73,613. 

Ethereum, meanwhile, is currently trading at $2,693.91 — down 0.3%.