Analysts Find On-Chain Data Supporting Bullish Environment for Bitcoin
Analysts at cryptocurrency exchange Bitfinex have discovered on-chain data that suggests a more bullish environment for Bitcoin (BTC) following the asset’s break above the $50,000 level. According to the latest Bitfinex Alpha report, current on-chain indicators like the Market Value to Realized Value (MVRV) and realized price metrics indicate that we are still in the early stages of a bull season.
More Room for Growth
The MVRV ratio is a tool used to analyze Bitcoin market cycles and identify tops and bottoms. An MVRV ratio greater than 2.4 indicates substantial unrealized profits, while a value below 1.0 shows unrealized losses. The ratio is currently above its one-year Simple Moving Average for support, signaling the continuation of a major BTC price appreciation phase.
“This crossover essentially reflects a heightened capacity and willingness among holders to maintain their spot positions prior to opting for profit-taking,” analysts said.
In addition to the MVRV ratio, the short-term holder realized price metric also suggests positive signals as this group of investors has slowed down in profit-taking, indicating that BTC still has more room for growth.
Bitcoin ETFs Accumulate More BTC
As BTC rallies to its yearly high, outflows from Grayscale’s Bitcoin exchange-traded fund (ETF) have slowed down, while other crypto funds are experiencing an increase in inflows. The other nine products now hold 216,309 BTC, surpassing MicroStrategy’s holdings.
Bitfinex expects the inflows to continue as the market anticipates the upcoming Bitcoin halving in April. The combination of these inflows, the impending halving, and the high levels of illiquid supply held by long-term holders paints an exceptionally bullish picture for BTC price movements.
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