On-Chain Indicators Suggest a Critical Point in the Crypto Market
Several on-chain indicators are signaling a potential shift in the cryptocurrency and Bitcoin market. These indicators have historically marked the beginning of a long-term bull market.
3 On-Chain Signals: Value Map
The on-chain value map indicator combines three fundamental indicators to identify the fair value of Bitcoin. When the BTC price is near this line, it is neither overvalued nor undervalued.
In contrast, when the price deviates from fair value, it indicates an overvaluation or undervaluation of Bitcoin. The two bands above fair value are reached during bull markets, while the two bands below are associated with bear markets.
Currently, Bitcoin has returned to the green fair value area, suggesting a period of sideways trending and accumulation before a mature bull market.
Realized Market Capitalization Also Turns Upward
The realized market capitalization of Bitcoin is another indicator showing similarities to the on-chain value map. It exhibits a key moment of cycle change and historically changes its direction around the halving of BTC.
Realized capitalization values different parts of the supply at different prices, providing a more precise measure than bare market capitalization. A reversal in the realized capitalization chart signals an impending bull market.
On-Chain Signals: Long-Term Holders Begin to Sell
The threshold of long/short-term holders is another on-chain signal indicating a potential shift in the market. Mature bull markets are characterized by a decline in long-term holders and an increase in short-term holders.
The current situation shows long-term holders reaching an all-time high while short-term holders bounce off an all-time low. This suggests a possible cyclical trend change and an impending bull market if short-term holders start accumulating Bitcoin.
Hot Take: A Critical Point in the Crypto Market
On-chain indicators are pointing towards a critical point in the cryptocurrency and Bitcoin market. The value map, realized capitalization, and long/short-term holder threshold all suggest a potential shift towards a bull market.
These indicators have historically been correlated with the start of a bull market, often occurring during halving events. While timing is uncertain, the current trends indicate that a change in the long-term chart is imminent.
Regardless of when this turnaround occurs, it is important to conduct your own research and consult with professionals before making any financial decisions.
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