On-Chain Data suggests that Bitcoin Price in Early Bull Market Cycle
Bitcoin price has seen a strong uptrend of over 15% in the past week. BTC is now at the critical 200-WMA level, just above $25,000 Trader speculate whether the recent rally is a “bulltrap” and should avoid or jump into buying Bitcoin at the current price. These five metrics on-chain indicate that Bitcoin has reached its cycle bottom.
Also read: Will Bitcoin’s Price Rise Above the Key 200-WMA Levels? Or it’s a “Bull Trap”.
Five On-Chain Metrics Reaffirm Bitcoin Cycle Bottom
1. MVRV Ratio
The MVRV Ratio is the ratio between a coin’s market cap and its realized capital. It shows whether Bitcoin’s value is high or low. It is the lowest value of Bitcoin’s price, historically.
Mid-Jan saw Bitcoin’s MVRV ratio rise above 1. This indicates that Bitcoin has entered a bullish market cycle and has already bottomed. Investors should still take advantage of the opportunity as the ratio currently stands at 1.22.
2. Supply in Loss (%)
The Supply in Loss ratio is the sum of UTXO loss and total UTXO values. It is a measure of market sentiment and shows how much Bitcoin investors have lost.
The Supply in Loss (%) has been decreasing rapidly since January, which suggests that the BTC price has bottomed.
Bitcoin: Supply in Loss %3. SOPR Ratio
The SOPR Ratio can be calculated as the long term holders’ Spent Profit Ratio (SOPR), divided by the short term holders SOPR. The ratio’s higher value means that long term holders have more spent profit than short term holders. It is useful for determining market tops and short-term behavior. The bullish Bitcoin scenario is also confirmed by the SOPR ratio.
Bitcoin SOPR Ratio4. Net Unrealized Profit/Loss (NUPL)
Net Unrealized Profit Loss (NUPL), is the difference between market capital and realized cap divided with market cap. It is the sum of all profit and losses in all BTC in circulation. Values above ‘0’ mean that investors are in profit. An increasing trend in value indicates that more investors are becoming profitable. The current value is 0.18.
5. Puell Multiple
The Puell Multiple measures daily issuance in relation to the moving average of daily issued. It determines whether the Bitcoin price has changed in relation to historical issuance rates. Below 0.5 means bottom formation. Puell Multiple is currently 1.07, which indicates bullish momentum following a January bottom formation.
Bitcoin: Puell MultipleAlso read: CZ Takes on Kraken Boss over “Offshore Exchanges”.
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The content presented may contain the author’s personal opinion and is subject to market conditions. Before investing in cryptocurrency, do your market research. The publication or the author are not responsible for any financial loss.