Bitcoin’s recent price action has been nothing short of exhilarating, but beyond the market buzz lies a wealth of on-chain data offering deeper insights. By By analyzing metrics such as network activity, investor sentiment and BTC market cycles we can gain a better understanding of the current state of the cryptocurrency market. Bitcoin's current position and potential trajectory.
Plenty Of Upside Remaining
The MVRV ZScore Compares Bitcoin's market cap, or price multiplied by circulating supply, with its realized cap, which is the average price at which all BTC were last transacted. HistoricallyThis metric signals overheated and volatile markets when it enters into the red zone. In contrast, the green zone indicates widespread losses or potential undervaluation.
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Currently, despite Bitcoin's rise to new all-time highs, the Z-score remains in neutral territory. Previous Bull runs saw Z-scores soar to 7 to 10 – far above the current level of 3. If This is a clear indication that there is still room for significant price growth.
Miner Profitability
The Puell Multiple The profitability of a miner can be evaluated by comparing the daily revenue in USD to their previous moving average. Post-halving, miners’ earnings dropped by 50%, which led to a multi-month period of decreased earnings as the BTC price consolidated for most of 2024.
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Yet even now, as Bitcoin The multiple only indicates a 30% increase relative to historical norms. This According to the data, we are still in early to mid-stages of the bull market. And when we compare the patterns in the numbers, we can expect explosive growth comparable to that seen in 2016 and in 2020. With A post-halving reset is followed by a consolidation and finally, a reclaimation of the multiple level of 1.00, which signifies the exponential phase of the price action.
Measuring Market Sentiment
The Net Unrealized Profit You can also find out more about the following: Loss (NUPL) metric quantifies the network's overall profitability, mapping sentiment across phases like optimism, belief, and euphoria. Similar MVRV ZScore As it is derived either from the realized value or the investor cost-basis it looks at current estimated profits or losses for all holders.
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Presently, Bitcoin remains in the ‘Belief’ zone, far from ‘Euphoria’ or ‘Greed’. This The data is consistent with other data that suggests there is still room for price appreciation. Especially Consider that this metric has not yet reached the levels it reached earlier in the year. March We set the previous all-time record.
Long-Term Holder Trends
The The percentage of the total amount Bitcoin The 1+ represents a long-term event that has lasted over a year. Year HODL Wave……………???????? %…………..???????????????????????????????????????????????????????????????????????????????????????????? Bitcoin History before this cycle Prior Price peaks in 2017 & 2021 saw values drop to 40% & 53% respectively as long-term owners began to realize profit. If If this were to happen, then there would still be millions of bitcoins to be transferred to the new market participants.
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So Only 800,000 BTCs have been transferred so far. Long Term Holder Supply Newer market players during this cycle. In past cycles, up to 2–4 million BTC changed hands, highlighting that long-term holders have yet to cash out fully. This The current bull run is in its nascent stage.
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Tracking “Smart Money”
The Coin Days Destroyed The holding time of coins is used to weigh transactions, highlighting whale activity. We Multiply the value of the BTC at the time by the price. Value Days Destroyed (VDD) Multiple. This This gives us a clear indication of whether the biggest and most intelligent BTC holders have begun to make profits on their positions.
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Current Levels remain well below the red zones seen during market tops. This means whales and “smart money” are not yet offloading significant portions of their holdings and are still awaiting higher prices before beginning to realize substantial profits.
Conclusion
Despite The rally’s on-chain metrics strongly suggest that Bitcoin The temperature is still not too high. Long-term holders remain largely stable, and indicators such as the MVRV z-score, NuPL, and Puell Multiple All highlight the room for growth. That Accordingly, profit-taking by some market participants and the entry of new players could indicate a transition from a mid to late cycle phase, which may last until 2025.
For Investors, the main takeaway is to stay data-driven. Emotional FOMO, euphoria and other emotions can lead to poor decisions. InsteadFollow the data that fuels Bitcoin Use tools such as the metrics discussed above for your own analysis and investing.
For Check out this recent YouTube video for a deeper look at the topic. What's Happening On-chain: Bitcoin Update
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