On-Chain Metrics Point to Potential Bitcoin Bottom
Analysts at market intelligence platform CryptoQuant have highlighted key on-chain metrics that could suggest the bitcoin (BTC) price has hit bottom and cryptocurrencies are poised for a potential rally.
Signs of Higher Bullish Momentum
The latest weekly CryptoQuant report identifies several signals that indicate a possible turnaround in the crypto market:
– The Bitcoin Bull-Bear Market Cycle indicator shows the market is currently at its least bullish level since March 2023.
– Bitcoin demand growth needs to accelerate to levels seen earlier in the year for prices to recover.
– Increased buying from long-term Bitcoin holders may indicate a price bottom.
Bull-Bear Market Cycle Indicator
The Bull-Bear Market Cycle indicator from CryptoQuant suggests that the crypto market is at its lowest level of bullish sentiment since the U.S. banking crisis in March 2023. To signal a potential recovery:
– The indicator needs to rise above its 30-day simple moving average.
– Bitcoin prices must gain bullish momentum to push higher.
Bitcoin Demand Growth
Bitcoin demand growth is a crucial factor in price recovery. While demand has slightly improved since May, it remains significantly lower than earlier in the year:
– Long-term Bitcoin holders are currently purchasing BTC at a slower pace compared to the first quarter.
– Accelerated demand growth is necessary for prices to regain upward momentum.
Potential Major Correction
Bitcoin’s price support level at $56,000 based on Metcalfe price valuation bands is critical:
– A drop below this level could trigger a major correction in the market.
– Traders’ on-chain unrealized profit margins turning positive could indicate potential rallies.
Stablecoin Liquidity Acceleration
Stablecoin liquidity growth is another key metric to watch for a market recovery:
– An increase in Tether’s (USDT) market cap over a 60-day period suggests capital inflow.
– Improved liquidity is essential for prices to move higher.
Hot Take: Is Bitcoin Ready to Rally?
As on-chain metrics point to a potential bottom in the price of bitcoin, investors are cautiously optimistic about a market recovery. Keep an eye on key indicators like bullish momentum, demand growth, and stablecoin liquidity to gauge the crypto market’s direction in the coming weeks.
Sources:
– https://cryptopotato.com/wp-content/uploads/2024/01/Bitcoin_Bottom.jpg
Owen Patter is a distinguished crypto analyst, accomplished researcher, and skilled editor, leaving a notable imprint on the cryptocurrency landscape. As a proficient crypto analyst and researcher, Owen delves into the intricate realms of digital assets, offering insights that resonate with a diverse audience. His analytical acuity is harmoniously paired with adept editorial skills, allowing him to transform complex crypto information into easily comprehensible content. Owen’s contributions serve as a valuable guide for both seasoned enthusiasts and newcomers, aiding them in navigating the dynamic world of cryptocurrencies with well-researched perspectives. With a meticulous commitment to precision, he empowers informed decision-making in the ever-evolving crypto domain.
