5 of 7 On-Chain Indicators Signal Bull Run Onset

Over the past three months, the cryptocurrency markets have been moving sideways, which has led to a lot of speculation about the future direction of the market. According to one analyst, there are at least five on-chain indicators that suggest the bull market may just be getting started. Since the end of February, the total market capitalization of cryptocurrencies has been stuck around $2.5 trillion. There’s an ongoing debate among market observers about whether this cycle is nearing its end or just beginning anew.

The five on-chain indicators highlighted by the analyst, who goes by the name “ELI5 of TLDR,” were discussed on May 19. These indicators give a hopeful outlook for the continuation of the bull market. One of these indicators is Bitcoin’s market dominance, which currently stands above 56%. Historically, a high level of Bitcoin dominance is typical at the start of a crypto bull market. Traders usually exit their altcoin positions during a bear market cycle, causing Bitcoin’s dominance to rise. Conversely, when Bitcoin dominance drops and an “altseason” begins, it often signals the later stages of a bull cycle. As of now, Bitcoin’s dominance has been above 50% since October 2023, suggesting that the bull market may just be warming up.

Another crucial indicator is the Bitcoin MVRV Z score, which measures the asset’s current market value against its historical average. Typically, this metric peaks around 6 during market cycle tops. At present, the score is less than half of that, suggesting there is still substantial room for growth before hitting a peak. The last time this metric exceeded 6 was in March 2021.

The Puell Multiple also shows a promising outlook. This metric calculates the daily value of Bitcoin mined divided by the yearly moving average of that value. Historically, a Puell Multiple exceeding 3 aligns with market cycle tops. After the halving event on April 20, this multiple fell below 1, and during the price surge in mid-March 2024, it only reached 2.4. Consequently, this metric as well indicates that the market has not yet reached its peak.

HODL Waves provide additional insights into the market’s dynamics. These charts highlight how much Bitcoin is held by different investor cohorts based on the length of time they have held the asset. When newer investors dominate, there tends to be more selling pressure, which is not favorable for future gains. The current data show a decrease in activity from newer holders, indicating that selling pressure may have been exhausted, which is a bullish signal.

Another encouraging metric is the miner revenue per hash, which measures the earnings of Bitcoin miners for their proof-of-work efforts. While this metric generally trends downward as network difficulty increases, previous spikes to $0.3 per terahash per second have coincided with market peaks. According to ELI5, this metric still holds bullish potential.

Despite these positive indicators, there are also metrics suggesting caution. The RHODL ratio, which compares the price of recently bought coins to those purchased 1-2 years ago, indicates overheating if new buyers are paying significantly more than long-term holders. This ratio flagged potential overheating in March, implying that the market could be nearing a top.

The Cumulative Value-Days Destroyed (CVDD) metric has also shown signs of peaking. This metric tracks the sum of value-time destruction as coins change hands, with spikes indicating market tops. Elevated activity from older coins might be a sign that the market is reaching its peak.

As of the time of this analysis, Bitcoin was trading at $66,668, having dropped 10% from its all-time high in mid-March. While some metrics suggest caution, the overall sentiment from these five on-chain indicators points to the potential for further bullish activity in the crypto market.

14 thoughts on “5 of 7 On-Chain Indicators Signal Bull Run Onset

  1. The decrease in activity from new HODLers looks like a strong bullish sign. Excited for whats next!

  2. Every crypto ‘expert’ has a different opinion. How does anyone take this analysis seriously when they can’t even agree among themselves?

  3. This whole analysis feels like a desperate attempt to pump the market. I’ve been burned too many times to believe in any of this anymore πŸ”₯.

  4. The market capitalization has been stuck at $2.5 trillion for three months! That’s a clear sign of stagnation, not a hint of a bull run 🚫.

  5. It’s these detailed analyses that keep me optimistic about the market. Bring on the bull run!

  6. Every single time there’s a little bit of positive news, you see articles like this. But reality? Market still performs unpredictably .

  7. Love seeing well-researched insights like these! Helps keep my crypto confidence high!

  8. HODL Waves? Really? So we’re basing market predictions on people not selling their Bitcoin? Sounds like wishful thinking to me.

  9. Excited by these positive indicators! The sideway market is just a phase before the big run!

  10. Feeling more confident about the market after reading this. Thanks for the great analysis!

  11. CVDD metric showing signs of peaking… how can that be a good thing? Seems like this market is ready to implode any second now .

  12. Loving the insight into Bitcoin’s market dominance. Looks like the bull market is just heating up!

  13. All this ‘on-chain indicator’ stuff is just technical jargon to make people think there’s a method to the madness. There isn’t. It’s still gambling .

  14. Seeing Bitcoin dominance up always gets me excited for the next bull phase! Let’s go! πŸš€πŸ”₯

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