Despite recent sideways movement in the market, on-chain indicators suggest Bitcoin's bull run might just be getting started. Analyst "ELI5 of TLDR" highlights five key metrics painting a bullish picture:
High Bitcoin Dominance (Above 56%)
Historically, bull markets begin with strong Bitcoin dominance as traders hold onto BTC after a bear cycle. Currently, Bitcoin's market share remains high at over 56%, indicating we might be in the early stages.
2. Low Bitcoin MVRV Z Score (Under 6)
This metric compares Bitcoin's market value to its historical average. Historically, it peaks around 6 during bull market tops. The current score is less than half that, suggesting potential for further growth.
3. Puell Multiple Not Yet Over 3
The Puell Multiple, another metric linked to cycle peaks, hasn't reached its peak yet. It currently sits below 3, whereas past bull runs saw peaks exceeding 3.
4. Bullish Signals from HODL Waves
Charts analyzing how long different cohorts have held Bitcoin (HODL Waves) show potential for further gains. A decline in selling pressure from recent buyers suggests room for price increases.
5. Bitcoin Miner Revenue Per Hash
This metric reflects miner income for processing transactions. While it naturally trends down, the past two spikes coincided with bull market peaks, offering a potentially bullish sign.
However, caution is advised. A couple of on-chain metrics suggest a possible market peak:
RHODL Ratio: This metric compares the average price of recent purchases to those made 1-2 years ago. A high ratio can indicate an overheated market, which we saw in March.
Cumulative Value-Days Destroyed (CVDD): This metric tracks coin movement from old to new holders. A spike in CVDD suggests a potential market peak.
Disclaimer: This information is for educational purposes only and should not be considered financial advice. Consult with a qualified financial advisor before making any investment decisions.
Current Bitcoin Price: $66,668 (as of writing)
Source: CoinTelegraph
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