Six of the eight indicators observed by analysts on the crypto data analytics platform Glassnode identify when Bitcoin A bear is exiting the market. Bullish signs are flashing, and the seventh is likely to turn green soon. Glassnode’s “Bitcoin Bear Recovery” Dashboard of Indicators Seeks to Help Bitcoin Investors Identify Bitcoin The market is moving towards a healthy trend given a mix of on-chain, technical and network fundamental indicators.
Historically, at least 5 of these indicators are flashing green when Bitcoin Prices are rising. Meanwhile, when all eight indicators start flashing bullish signals, it has historically been a good buy signal. Conversely, when less than five of these indicators are flashing green, of bitcoin The price is usually in a decline over the long term. Light blue shows time periods where at least five of the eight bullish positions have been met. Dark blue shows the time period when all eight are found.
Signals 1 and 2: Spot price trading above major pricing models
Glassnode groups these indicators into four categories. The first is whether bitcoin is trading above key pricing models – the 200-day simple moving average (SMA) and the actual price, which is an on-chain indicator that averages the last time each bitcoin on the network moved. Shows value. (The average value the wallet “paid” for their bitcoins when they received them).
With bitcoin’s 200DMA around $19,600 and its actual price around $19,800, bitcoin has recently moved back north of both of these key levels for the first time since December 2021. Thus both are glowing in green.
Signals 3 and 4: Network usage is increasing
The 30-day SMA of new addresses recently crossed above its 200-day SMA and is thus glowing green. it is historically Happened at the start of a bull market.
Meanwhile, the revenue to fee multiple still has a negative 2-year Z-score of approximately -0.33. The Z-score is the number of standard deviations above or below the mean of the data sample. In this example, Glassnode’s Z-score is the number of standard deviations above or below the average bitcoin fee revenue over the past 2-years.
Thus this indicator is still not flashing green. However, as history shows, that can change very quickly.
Signs 5 and 6: Market profitability is returning
The 30-day simple moving average (SMA) of the Bitcoin Realized Profit-Loss Ratio (RPLR) indicator recently moved above one for the first time since last April. This means that the bitcoin market is feeling a greater proportion of gains (denominated in USD) than losses.
According to Glassnode, “this generally indicates that sellers with unrealized losses have been eliminated, and a healthy flow of demand exists to absorb profit-taking”. Therefore, this indicator is sending a bullish signal.
Meanwhile, however, the Adjusted Spent Output Profit Ratio (aSOPR), an indicator that reflects the degree of actual profit and loss for all coins running on-chain, remains below 1 (indicating that the market is currently not in profit). ), it is bullish moving up and is likely to cross 1 soon. It was last at 0.988.
This is the seventh indicator that is not yet sending a bullish signal, but is likely to soon. Looking at bitcoin’s history over the past eight years, aSOPR rising above 1 after a long time has been a great buy signal.
Signal 7 & 8: BTC balance has shifted in favor of HODLers
According to Glassnode, the Bitcoin Realized HODL multiple has been trending upward for the past 90 days, which is a bullish sign. The crypto analytics firm says that “when the RHODL Multiple Transition turns into an uptrend in the 90-day window, it indicates that USD-denominated funds are starting to move back towards new demand flows”. This “indicates that profits are being taken, that the market has been able to absorb them… (and) that long-term holders are starting to spend the coin,” says Glassnode.
Glassnode’s final indicator of recovery from the bitcoin bears dashboard is whether the 90-day exponential moving average (EMA) of bitcoin supply has been in an uptrend over the past 30 days. Supply in profit is the number of bitcoins that moved last when USD-denominated prices were lower than they are now, meaning they were bought at a lower price and the wallet holds on to paper profit. This indicator is also flashing green.
So are we in a bitcoin bull market?
of 2022 macro headwind appear to be slowing down. US inflation is rapidly declining to more acceptable levels and the US economy is faltering according to recent survey data and corporate earnings. Bond Market Assessment That the Fed won’t be able to tighten rates further in 2023 is looking like an increasingly accurate call.
This narrative has been a key driver of bitcoin’s 2023 rally so far, and many think the price could find further support in the coming months. While some continue to scoff at the latest move as just another bear market rally, the above indicators in Glassnode’s dashboard suggest that this latest move could be something more.
And these aren’t the only on-chain indicators flashing signs of an upcoming bull market. According to an analysis posted on Twitter by @GameofTrade_, 6 on-chain metrics including accumulation trend score, unit-adjusted dormancy flow, reserve risk, realized value, MVRV Z-score and PUEL multiple, “are a generational long-term buy.” Calling for. chance”.
Elsewhere, the widely followed Bitcoin Fear & Greed Index recently moved back into neutral territory (i.e. above 50) for the first time after a long period of fear and extreme panic. A sustainable recovery to neutral often comes at the start of the next bitcoin bull run, such as in early 2019 and again in mid-2020.
An analysis by crypto-focused Twitter account @CryptoHornHairs made the jaw-dropping observation that bitcoin is roughly following in the footsteps of a four-year market cycle that has been in play for more than the past eight years. The analysis suggests that bitcoin could rally for about 1,000 days after bottoming out last November, before entering its next bear market in 2025.
A widely followed bitcoin pricing model is sending out a similar story. According to the bitcoin stock-to-flow pricing model, the bitcoin market cycle is roughly four years, with prices typically declining somewhere near the middle of the four-year interval between “halvings” – bitcoin halvings. Happening is a four-year event where the mining reward is halved, thus slowing the rate of bitcoin inflation. Past price history suggests that the next big rally for bitcoin will come after the next halving in 2024.
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