Common patterns in previous cycles inspire confidence beyond historical data. On-chain analytics play a crucial role in gauging investor psychology and market sentiment. Today, we’ll explore three signals indicating the commencement of the crypto bull season.
Has the Crypto Bull Market Begun?
Historically, major bull markets kick off with specific signals. Long-term charts from on-chain technical analysis provide clarity. For instance, the recent January 12th drop may be attributed to a $5 billion sell-off, but the warning came earlier as investor profitability neared 95%.
Value Map
The BTC on-chain value map by analyst therationalroot blends realized capitalization, liquid supply, and coin destruction. Four colors denote overvaluation or undervaluation, with the middle line indicating fair value. Currently at fair value, BTC’s price trend suggests a potential move towards overvaluation.
Realized Market Value
Realized market capitalization, valuing different parts of the supply at varied prices, aids in long-term cycle detection. Throughout bear markets, a slight decline in realized capitalization has been consistent over several years.
Long-Term Holders Selling
Glassnode’s chart reveals bull markets evolving as long-term holders sell to short-term traders. The blue line represents long-term holders, and the red line signifies short-term traders. In bear markets, accumulated assets are sold by long-term investors, fueling the eventual bull market peak. Monitoring short-term traders’ accumulation, including ETF entries, becomes vital as new investors enter the cycle through this channel.
