Has Bitcoin Bottomed?The research firm suggested that most on-chain metrics have bounced out of zones that have historically signaled a market bottom.
This is depicted in the first chart, which shows the most recent market bottom, from November 2019 to early January 2020, as being in the high $6k zone. Bitcoin has now returned to this area, which could signal an accumulation phase. The second chart shows the percent of UTXOs (unspent transaction outputs) in profit. This also appears to have hit a bottom of 70% in early March and is now heading back upwards. The percent of supply in profit mirrors the UTXO chart with a rebound as the Bitcoin price has recovered over the past couple of weeks.
On–chain metrics used to assess #Bitcoin market cycles are indicating a potential shift in sentiment.— glassnode (@glassnode) March 31, 2020
In the weeks after $BTC's price drop, most have bounced out of or sit in zones that have historically signalled bottoms and good entry points.https://t.co/tdWxHMdbLz pic.twitter.com/4C8ej9xOSz
Other Metrics Turning BullishChart No. 4 four shows the Puell Multiple, which is calculated by dividing the daily issuance value of Bitcoins in USD by the 365-day moving average of this value. It has dropped significantly below the price level, indicating that Bitcoin has been overvalued and has returned to undervalued levels. This could signify a sentiment shift and a return for the bulls. The MVRV ratio was created by Murad Mahmudov and David Puell as a way to compare realized value and market value by dividing one into the other. This chart shows that the ratio dipped below zero into the ‘green zone,’ indicating that the previous dip was a bottom and prices are recovering. The Reserve Risk metric in the final chart provides a visualization of confidence among long-term Bitcoin holders relative to the price of the asset at a given moment in time. It too bounced into a buying zone when BTC prices collapsed and is now back on the way up. There are many on-chain metrics that can be used to determine market sentiment for Bitcoin, and these six at least all signal that the bottom has been hit and prices are slowly grinding higher once again.
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