After the surge that we’ve seen this year, several on-chain measures from the Bitcoin (BTC) network are indicating that now is the time to purchase.
Bitcoin has emerged from its slumber to post a gain of 37% since the beginning of 2023, breaking out of its previous slump.
However, according to experts, on-chain data is still indicating it might be a “generational buying opportunity.”
On January 24, 2019, a researcher and technical analyst by the name of “Game of Trades” found six on-chain measures for the 71,000 people who follow him on Twitter.
The first measure is an accumulation trend score, and its purpose is to identify pockets of significant accumulation in terms of both the size of the organisation and the total amount of coins purchased.
The market analyst made the observation that “large entities have been in deep accumulation mode ever since the FTX collapse,” and went on to say that “similar accumulation took happened in the 2018 and 2020 bottoms.”
Six on-chain data pointing to a potentially generational and long-term purchasing opportunity for bitcoin
A thread called Game of Trades (@GameofTrades_), which may be found here. The 23rd of January, 2023 The ratio of the current market capitalization to the annualised dormancy value is the measurement that is used to determine the Bitcoin entity-adjusted dormancy flow.
When the dormant value surpasses the market capitalization, the market is said to have fully capitulated, which in the past has been a favourable purchasing zone.
Glassnode reports that in 2022, this measure reached an all-time low, making it the lowest point it has ever been.
The level of confidence that long-term Bitcoin holders have in relation to the price of Bitcoin may be measured using Bitcoin’s reserve risk.
According to the statistics provided by Glassnode, this dropped to its all-time lowest level by the end of 2022.
The Realized Price (RP) of Bitcoin is the worth of all coins in circulation at the price at which they were last traded. This is an estimate of what the whole market paid for their coins.
Since the fall of FTX in November till the 13th of January, Woo Charts indicate that Bitcoin has been trading at a price that is lower than this level.
At this moment, it is located slightly over the RP, which gives even another possibility for buyers.
The Bitcoin MVRV Z-score indicates if BTC is highly overvalued or undervalued in comparison to its “fair value” or the price it has actually been traded for.
It is common practise to consider the bear market to be over when the indicator no longer falls under the highly undervalued zone.
Last but not least, there is something called the Puell Multiple, which investigates the fundamentals of mining profitability and its influence on market cycles.