- \n
- Bitcoin is recovering at the start of the year. The cryptocurrency’s price has already surpassed MA 200<\/span> \u2014 a kind of boundary between bear and bull markets.<\/li>\n
- A multitude of on\u2011chain indicators are signalling in unison a forthcoming trend reversal.<\/li>\n
- Bitcoin’s correlation with the NASDAQ index has fallen to levels seen in December 2021. This is a positive factor for the crypto market.<\/li>\n<\/ul>\n<\/div>\n
What do the indicators say?<\/h2>\n
Technical analysis tools<\/h3>\n
Since the start of the year the price of the leading cryptocurrency has risen by about 40%<\/a> \u2014 from around $16,500 to about $23,100 (as of 24.01.2023). However, digital gold is still far from the all-time high (ATH) near $69,000 reached on 10 November 2021.<\/p>\n
![\\\"1-price\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/1-price-1024x336.png\\\")
Bitcoin price trading ~66% below ATH. Data: Messari<\/a> as of 24.01.2023.<\/figcaption><\/figure>\n Nevertheless, positive shifts in market conditions and readings from numerous indicators are encouraging.<\/p>\n
\n
\u00abAlthough there remains a risk of a pullback and retest of the lows, it is quite plausible that we are entering the early stages of a new bull market\u00bb, \u2014 \u043f\u043e\u0434\u0435\u043b\u0438\u043b\u0441\u044f \u043c\u043d\u0435\u043d\u0438\u0435\u043c<\/a> Look Into Bitcoin founder Philip Swift.<\/p>\n<\/blockquote>\n
On the weekly chart below you can see that at the start of the year a key support level B held. Rebounding from it, the price, like a knife through butter, pierced zone A. The latter had served as a bedrock for the volatile market for quite some time until the FTX collapse<\/a>.<\/p>\n
![\\\"2-TA-chart\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/2-TA-chart-1024x487.png\\\")
Key levels on the weekly BTC\/USD chart. Data: TradingView, Look Into Bitcoin.<\/figcaption><\/figure>\n Swift does not rule out the possibility of a renewed downtrend. However, in his words, the path of least resistance lies upward. The next important target is near the $25,000 level.<\/p>\n
For the first time since late December 2021, Bitcoin traded above the 200-day simple moving average \u2014 a kind of boundary between bear and bull markets.<\/p>\n
![\\\"2_1-200-DMA\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/2_1-200-DMA-1024x436.png\\\")
Data: Glassnode<\/a>.<\/figcaption><\/figure>\n Notably, the January rebound was supported by a substantial rise in trading volumes.<\/p>\n
![\\\"2_2-TradingVolume\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/2_2-TradingVolume.webp\\\")
Data: Arcane Research<\/a>.<\/figcaption><\/figure>\n On\u2011chain indicators<\/h3>\n
In early November 2022, the price of the leading cryptocurrency breached the bottom of the previous cycle<\/a>. Many thought that after overcoming the lower extreme a consolidation with recovery and a new bull trend was not far off. However, soon another \u201cblack swan\u201d<\/a> \u2014 the collapse of Sam Bankman-Fried\u2019s vast business empire \u2014 occurred. In the wake of the FTX collapse, Bitcoin reached $15,476 (BTC\/USDT on Binance).<\/p>\n
Indicators CVDD and the balanced price in the second half of the year pointed to a high likelihood of the price reaching a cyclic bottom. After a while, consolidation with subsequent market recovery did indeed begin.<\/p>\n
![\\\"3-Price-Forecast-Tools\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/3-Price-Forecast-Tools-1024x685.png\\\")
Data: Look Into Bitcoin.<\/figcaption><\/figure>\n With each day after the price rebound from key metric values, the odds of continuing the rally increase, according to Philip Swift.<\/p>\n
2022 was truly challenging for miners<\/a> \u2014 rising hash rate and difficulty amid falling prices forced many players to sell digital reserves and\/or exit the market. <\/p>\n
Against this backdrop Puell multiplier<\/a> has fallen into a zone of accumulation. The indicator is now leaving the \u201cgreen zone,\u201d historically signaling a shift from bear to bull.<\/p>\n
![\\\"4-The-Puell-Multiple\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/4-The-Puell-Multiple-1024x689.png\\\")
Data: Look Into Bitcoin.<\/figcaption><\/figure>\n The crossing of \u201chash ribbons\u201d and the exit from the red zone of the Hash Ribbons metric indicates that the worst times for miners are behind, and also points to the potential for a continued rally of digital gold.<\/p>\n
![\\\"5-Hash-Ribbons\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/5-Hash-Ribbons-1024x685.png\\\")
Data: Look Into Bitcoin.<\/figcaption><\/figure>\n According to Swift, the above indicators signal investor confidence returning. A better market mood can reduce selling pressure, which is also positive for the price. <\/p>\n
Bitcoin’s price has risen above the realized price for the first time in a long while. This is another positive signal for market participants, indicating a likely end to the bear phase.<\/p>\n
![\\\"6-Realized-Price\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/6-Realized-Price-1024x686.png\\\")
Data: Look Into Bitcoin<\/a>.<\/figcaption><\/figure>\n On the heels of the FTX collapse and its fallout, Bitcoin\u2019s realized capitalization at year-end fell 18.8% from ATH. This was the second-largest drawdown on record.<\/p>\n
![\\\"14-BTC-Realized-Cap-Drawdown\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/14-BTC-Realized-Cap-Drawdown.webp\\\")
Data: Glassnode, Bitcoin Magazine<\/a>.<\/figcaption><\/figure>\n Such drawdowns are a rare opportunity for buyers, Bitcoin Magazine analysts argue. They contend that buying Bitcoin during such periods can yield substantial long-term profits.<\/p>\n
The orange line of the MVRV Z-Score exits the \u201cgreen zone\u201d \u2014 another signal that the bottom has passed.<\/p>\n
![\\\"7-MVRV-1\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/7-MVRV-1-1024x689.png\\\")
Data: Look Into Bitcoin<\/a>.<\/figcaption><\/figure>\n The orange line of the RHODL Ratio is preparing to leave the oversold zone. Its orange line is preparing to leave the oversold zone. The latter marks the most favourable period for Buy & Hold and\/or DCA<\/a> strategies.<\/p>\n
![\\\"8-RHODL\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/8-RHODL-1024x503.png\\\")
Data: Look Into Bitcoin<\/a>.<\/figcaption><\/figure>\n First, long-run hodler activity in 2022 did not collapse; hours later tokens remained active and moved around. In 2022, more than 556 million BTC moved across the network worth almost $15 trillion. Compared with the previous year, that figure rose by 102%.<\/p>\n
![\\\"8_1-BTC-Total-Transfer-Volume\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/8_1-BTC-Total-Transfer-Volume.webp\\\")
Data: Bitcoin Magazine<\/a>.<\/figcaption><\/figure>\n Market sentiment<\/h2>\n
The aSOPR indicator finally rose above 1.0, a level it had not left since the end of April last year. This signals improving market sentiment and also suggests there is enough demand to absorb selling from taking profits.<\/p>\n
![\\\"9-aSOPR-1\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/9-aSOPR-1-1024x576.png\\\")
Data: Glassnode<\/a>.<\/figcaption><\/figure>\n The cryptocurrency fear-and-greed index has finally moved to neutral values, though since April 2022 it has largely stayed in the \u201cfear\u201d zone.<\/p>\n
![\\\"9_1-Fear-and-Greed\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/9_1-Fear-and-Greed.webp\\\")
Data: alternative.me<\/a>.<\/figcaption><\/figure>\n Addresses and hodlers<\/h2>\n
An important fundamental factor is the growth in the number of Bitcoin addresses with non\u2011zero balances. It points to rising participation and accumulation of coins on wallets of those who believe in Bitcoin’s long\u2011term potential.\u00a0\u00a0<\/p>\n
For example, in 2022 the number of addresses with a balance of at least 1 BTC rose by 20%. The metric is growing exponentially, approaching 1 million.<\/p>\n
![\\\"11-BTC-and-more\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/11-BTC-and-more.webp\\\")
Data: Glassnode, ForkLog\u2019s 2022 analytical report<\/a>.<\/figcaption><\/figure>\n Year\u2011over\u2011year, positive dynamics are also seen in smaller addresses, holding at least 0.01 BTC and 0.1 BTC.<\/p>\n
![\\\"12-001-BTC-i-01-BTC\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/12-001-BTC-i-01-BTC.webp\\\")
Data: Glassnode, Bitcoin Magazine<\/a>.<\/figcaption><\/figure>\n The number of Bitcoin on hodlers\u2019 wallets (including coins aged more than 155 days) is approaching 14 million BTC, about 72.5% of the total circulating supply.<\/p>\n
![\\\"12_1-BTC-Annual-Long-Term-Supply\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/12_1-BTC-Annual-Long-Term-Supply.webp\\\")
Data: Glassnode, Bitcoin Magazine<\/a>.<\/figcaption><\/figure>\n \n
\u00abThere are people around the world who are buying this asset. There is a huge and growing cohort accumulating Bitcoin, regardless of the price\u00bb, said Dylan LeClair of Bitcoin Magazine.<\/p>\n<\/blockquote>\n
HODL waves weighed by realized price point to a full market reset after the late-2021 peak (red and yellow bands). Such cooling has occurred at the bottom of previous bear cycles.<\/p>\n
![\\\"12_2-HODL-Waves\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/12_2-HODL-Waves-1024x514.png\\\")
Data: Look Into Bitcoin<\/a>.<\/figcaption><\/figure>\n Macro factors<\/h2>\n
Limited supply and a host of other factors give grounds to suppose that global uptake could push Bitcoin’s price to astronomical heights. <\/p>\n
![\\\"13-Total-Global-Store-of-Wealth-Estimates\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/13-Total-Global-Store-of-Wealth-Estimates.webp\\\")
![\\\"15-BTC-and-Nasdaq-correlation\\\"](\\\"https:\/\/u1f987.com\/wp-content\/uploads\/15-BTC-and-Nasdaq-correlation-1024x448.png\\\")