What do these indicators say about a potential Bitcoin bull scenario in the near future?
Bitcoin, the world’s largest cryptocurrency, continues to trade below $40,000 with many suggesting that crypto winter is finally here. In fact, some analysts expect volatility to escalate further this month. Especially as investors reduce their exposure to assets deemed risky.
However, several indicators appear to be providing much-needed bullish signals to allay growing concerns.
Bear side confronted bull faction
Report Blockchain analysis firm Glassnode’s Weekly pointed out these bullish scenarios. At the same time, Bitcoin’s on-chain fundamentals are pointing to an uptrend. Accordingly, the recent market correction will not last too long.
First, the report highlights Bitcoin’s illiquid supply. Recently, this indicator has been bullish despite the bearishness on the charts.
Offer is illiquid | The source: glass node
According to the report, this is a positive indicator because:
“Interestingly, in the current market, prices are falling while supply is illiquid in a clear uptrend. This week alone, over 0.27% of supply (~51,000 BTC) has moved from an illiquid state to an illiquid state. In a bearish macro environment, this raises the question of whether a bullish supply divergence (similar to May-July 2021) is at work.”
The report also mentions Bitcoin’s NVT (Network Value to Transaction Value). NVT trades between “28 days faster (green) and 90 days slower (pink)” price patterns.
NVT .Fair Value Model | The source: glass node
“Calculation of the 90-day NVT price to price ratio will result in ‘NVT Premium’ (NVT Spread) currently trading at lows that were previously considered undervalued. Previous instances of this high volume relative to market cap have resulted in strong bullish momentum during bear markets or macro market bottoms such as December 2018 and March 2020.”
In addition, several other indicators are also showing support signals. For example, the number of wallets with non-zero balances glass node has reached a new ATH (about 40.137 million).
This indicator has been steadily increasing since ATH $69k inception despite the price decline. Additionally, transactions of $10 million or more account for 45% of the total volume processed.
Trading volume | The source: glass node
In contrast, transaction sizes > $1 million account for more than 70% (on a company-adjusted basis) of the total volume processed. Large trades maintained increasing dominance throughout 2021. It’s worth noting that they actually peaked higher during this correction.
However, at the time of writing, Bitcoin is still trading in the red and is down 4% in the last 24 hours. Regardless of bullish indicators, BTC is still waiting for the catalysts to push the price above $40,000.
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Analysis
What do these indicators say about a potential Bitcoin bull scenario in the near future?
Bitcoin, the world’s largest cryptocurrency, continues to trade below $40,000 with many suggesting that crypto winter is finally here. In fact, some analysts expect volatility to escalate further this month. Especially as investors reduce their exposure to assets deemed risky.
However, several indicators appear to be providing much-needed bullish signals to allay growing concerns.
Bear side confronted bull faction
Report Blockchain analysis firm Glassnode’s Weekly pointed out these bullish scenarios. At the same time, Bitcoin’s on-chain fundamentals are pointing to an uptrend. Accordingly, the recent market correction will not last too long.
First, the report highlights Bitcoin’s illiquid supply. Recently, this indicator has been bullish despite the bearishness on the charts.
Offer is illiquid | The source: glass node
According to the report, this is a positive indicator because:
“Interestingly, in the current market, prices are falling while supply is illiquid in a clear uptrend. This week alone, over 0.27% of supply (~51,000 BTC) has moved from an illiquid state to an illiquid state. In a bearish macro environment, this raises the question of whether a bullish supply divergence (similar to May-July 2021) is at work.”
The report also mentions Bitcoin’s NVT (Network Value to Transaction Value). NVT trades between “28 days faster (green) and 90 days slower (pink)” price patterns.
NVT .Fair Value Model | The source: glass node
“Calculation of the 90-day NVT price to price ratio will result in ‘NVT Premium’ (NVT Spread) currently trading at lows that were previously considered undervalued. Previous instances of this high volume relative to market cap have resulted in strong bullish momentum during bear markets or macro market bottoms such as December 2018 and March 2020.”
In addition, several other indicators are also showing support signals. For example, the number of wallets with non-zero balances glass node has reached a new ATH (about 40.137 million).
This indicator has been steadily increasing since ATH $69k inception despite the price decline. Additionally, transactions of $10 million or more account for 45% of the total volume processed.
Trading volume | The source: glass node
In contrast, transaction sizes > $1 million account for more than 70% (on a company-adjusted basis) of the total volume processed. Large trades maintained increasing dominance throughout 2021. It’s worth noting that they actually peaked higher during this correction.
However, at the time of writing, Bitcoin is still trading in the red and is down 4% in the last 24 hours. Regardless of bullish indicators, BTC is still waiting for the catalysts to push the price above $40,000.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
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