With bitcoin’s price surging by over $5,000 since the start of the year and reclaiming $20,000, the number of analysts predicting that the asset is out of the woods continues to increase.
CryptoQuant is the latest analytics company to offer some insight into the key on-chain signals that could suggest the start of a bull run.
Shortly after Santiment informed that the supply of bitcoin held on centralized exchanges had dropped to a multi-year low, CryptoQuant outlined the movements between different types of trading venues as the first positive sign for BTC.
More precisely, the analysts believe the transfers of assets from spot to derivatives platforms show that traders have entered a “risk-on” mode, which suggests “the beginning of a new bull cycle.”
The MVRV ratio is next, which shows whether BTC’s price is under or overvalued, comparing the actual market cap with the asset’s market price.
“MVRV is above 1 (1.07), and it is close to its 365-day moving average (orange line), which shows that bitcoin is about to start a new uptrend.”
The Net Unrealized Profit/Loss (NUPL) is also close to the 365-day MA, which suggests the same as the MVRL.
The Puell Multiple – showing the ratio of the daily dollar worth of newly issued BTC to their one-year MA – is the fourth signal. It displays positive signs as the asset’s price passed its 365-day MA for the first time in over two years.
Lastly, CryptoQuant’s P&L index, which combines several indicators (the MVRV ratio, NUPL, and LTH/STH SOPR) into one, is “close to giving a buying signal for BTC.” Although the company said the Index still shows that bitcoin is expensive in the short term, it’s on the verge of changing its tides.
Recall that Glassnode also said there are early signs of a starting bull market after a bear cycle that lasted for about a year.
The post 5 On-Chain Factors Suggest Bitcoin’s Bull Run Could Have Started: Analysis appeared first on CryptoPotato.
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