According to crypto analyst Yashu Gola, Bitcoin metrics and long-term holders’ confidence point to a market base formation. We have prepared the analyst’s metric reviews and evaluations for our readers.
BTC price has been holding above $18,000 since June
Bitcoin (BTC) slumped following macro indicators that the Fed will continue to raise rates. However, BTC remains in the $18,000 – $20,000 range, showing a strong bias clash in the market.
Notably, BTC has not been able to drop below $18,000 since it first tested it in June 2022. As a result, some analysts believe the president cryptocurrency has hit bottom, given that it has corrected more than 70% from the record high of $69,000 he saw almost a year ago.
In its weekly crypto market report, Arcane Research highlights:
During the 2018 bear market, BTC saw a peak-to-bottom drop of 84%, which lasted 364 days. The 2014 cycle was longer at 407 days. Both bases were followed by unusually low volatility.
In addition, widely watched on-chain Bitcoin metrics also point to a possible bullish turn in the future. Let’s take a look at some of the most historically valuable metrics.
Bitcoin MVRV-Z Score
The MVRV-Z Score evaluates Bitcoin’s overbought and overbought conditions at market and fair value. Historically, it indicates a market peak (red zone) when Bitcoin’s market cap exceeds its fair value. Rather, it indicates the market floor (green zone) when the market price falls below the fair value.
The MVRV-Z Score has been in the green zone since the end of June. This shows that Bitcoin has hit the bottom.
Bitcoin’s Reserve Risk valuates the confidence of the token’s long-term holders relative to its current price. Historically, a higher Reserve Risk (red zone) has coincided with market peaks reflecting lower investment belief at record high Bitcoin prices. On the contrary, higher belief and lower Bitcoin price means lower Reserve Risk (green zone) or smoother risk/reward for investment.
Bitcoin’s Reserve Risk plunged into the green zone in late June. Thus, he signaled that sooner or later BTC will experience a strong bullish reversal.
Bitcoin Puell Multiple
Puell Multiple reflects the rate of daily Bitcoin issuance and the moving average of 365 days of issuance. Historical information shows that the Bitcoin market hit bottom when Puell Multiple fell into the green zone defined in the range of 0.3-0.5. On the contrary, the market peaks when the rate moves into the 4-8 red zone.
As of October, Bitcoin’s Puell Multiple is inside the green zone. This indicates a potential price reversal to the upside. Koindeks.com As we reported, BTC stability on cryptocurrency exchanges has also dropped to several-year lows at the fastest pace since June. This shows that current price levels have become a valuable accumulation area.