The so-called on-chain indicators of Bitcoin and according to the last criptonoticias, those that come from statistics and parameters that reflect its activity on the blockchain, currently provide signals that are favorable to an evolution of the price of BTC.
Bitcoin blockchain data analytics company CryptoQuant posted a list of indicators on that cryptocurrency on Twitter, accompanied by a buy or sell recommendation.
In the long term, most of the on-chain indicators show a strong trend of high interest, as shown in the following table.
Many of us know that Bitcoin is not only evaluated in terms of price, supply, and demand, there are other metrics that further value the positioning of investors. On-chain metrics are another scientific method that allows you to really evaluate the sentimental and fundamental state of the asset.
Anyway, and reviewing the weekly Bitcoin chart, we see that we are being supported by the channel created by the EMA21 and the EMA9 and outside the historical low trend line, above the 0.6 Fibo and very close to the 0.5 Fibo and within a trend that can generate wave 5 and continue with the correction in wave 4.
Most of the indicators at this time show a certain neutral trend but with the possibility of correction in the medium term. There is still confusion between divergence and convergence.
To calculate this index, the value in USD of all the outgoing flows of BTC from the mining pools is taken and divided by the 365-day moving average of the outgoing flows of BTC from those pools.
A value greater than 2 suggests that miners are selling the mined BTC, while a negative value shows that they are avoiding selling and favoring accumulation.
The Puell Multiple is the value in USD of the BTC issued daily divided by the 365-day moving average of the value of the daily issue. This indicator explores market cycles from the miners’ income point of view.
The graph shows periods in which the value of the bitcoins issued daily is very low, and the Puell Multiple, as in this case, which is less than one, 0.84. The curve goes into the green box. Here the investor who buys is favored since he will receive significant returns if he sells later.
The lows of the Puell Multiple usually coincide with a trough of the BTC price curve. In the opposite scenario, from a tall Puell Multiple, whoever sells makes large profits.
The basic theory of the so-called Hash Ribbons or Hash Ribbons is based on the fact that the bitcoin market tends to reach a valley when miners are forced to sell BTC, to cover the costs of mining.
Also when there are a significant number of small miners who quit mining or capitulate. This occurs when there is an intense price correction and the mining operation falls below the lowest point of profitability.
The so-called hash tapes in their simplest version are two curves of 30-day and 60-day moving averages of the Bitcoin hash rate. When the 30-day moving average curve crosses and moves above that of the 60-day moving average, the miners’ capitulation process is already ending. Buying BTC at such times can lead to great returns.
Compared to the difficulty close to 100T, an amplitude of 125M is quite a low value. That low relative value implies that the curves are close to the crossing, so it is conducive to buy.
The so-called Difficulty Tapes are also built with moving averages and can fulfill the same prediction function of the Hash Tapes, but they do so about two weeks after the Hash Tapes.
CryptoQuant records, for the last year, the exchanges’ daily BTC reserves. And this has varied, with a decreasing pattern, in a range from 2.82 million BTC to 2.38 million BTC.
At the present time, CryptoQuant records 2.38 million BTC in the reserves of all exchanges, a low of the curve, which is coming down, which is a bullish sign.
Those reserves peaked at 2.82 million BTC in mid-March, when the crash of Bitcoin and cryptocurrencies occurred, in conjunction with all markets and stock indices.
Upon reaching the BTC reserves of exchanges a minimum in the last year, this indicator also recommends the purchase.
By dividing the market capitalization value of BTC by the market capitalization of all stablecoins in BTC, the Stablecoin Supply Rate (SSR) is obtained.
The higher the supply in the stablecoin markets, the lower the SSR. Increased buying pressure for BTC and other major cryptocurrencies may then arise. This can form upward pressure on the BTC market.
CryptoQuant and Glassnode highlight that the SSR value of 13.96, at the time of posting the tweet, on September 16, was a record low. At the time of writing, the SSR had already dropped to 13.82. CryptoQuant places as a recommendation, regarding the value of this indicator, «Strong Buy».
The total number of stablecoins on exchanges reaches 2.33 billion, and there is a growth of more than 50% since September 14. The fact that they are regulated gives stablecoins an important role in the cryptocurrency market as suppliers of liquidity, says CryptoQuant.
“Thus, a greater supply of stablecoins in the market may indicate greater buying pressure from cryptocurrencies such as BTC,” says the data analysis company.
The MVRV ratio is obtained by dividing the value of the market capitalization of bitcoin, by the effective capitalization. This is defined by assigning the BTCs of a bitcoin address the price they had in their last movement.
In this way, weight is removed from those coins that have not moved in a long time.
Although MVRV values below 1 are more conducive to buying, CryptoQuant, with the current index at 1.46, notes that a buying opportunity is offered with bitcoin.
The Reserves versus Flow or Stock-to-Flow model, which is associated with the scarcity of an asset, measures the relationship between the supply of an asset and the annual growth of the production of that asset. CriptoNoticias addressed this metric by exposing various indicators proposed by Grayscale to perform a Bitcoin valuation.
Bitcoin, with decreasing inflation over four-year periods, exhibits a rising reserve vs. flow curve. This gives it store-of-value attributes, like gold and silver, according to Grayscale.
The forecast for the current moment of the model reserves versus the flow, provided by CryptoQuant is higher than USD 18,000, then it recommends the purchase.
While many of the indicators presented tend to be based on historical patterns, they do not guarantee absolute predictability. The coincidence that they favor an uptrend, however, offers different criteria that can be contrasted and compared in a later analysis.
According to data from analytics firm Chainalysis and criptofacil, the Bitcoin network is receiving new investors at an accelerated pace.
One of the metrics to calculate this data is the so-called “youth addresses.” These addresses are those created less than three months ago.
According to the data, the number of new addresses jumped to almost 2.3 million in September alone. The number is almost double the 1.2 million registered six months ago.
In addition, it is the largest number of new addresses since February 2018, when just over 2.3 million were registered.
It is possible to notice a strong correlation of the curve with the price of Bitcoin. With few exceptions, the movement of both data is usually mirrored.
The growth curve was much flatter in the first two months of the year. However, since the fall in Bitcoin’s price in March, it has grown almost exponentially.
Interpreting the data, it appears that investors took advantage of the 40% drop in the price of Bitcoin on March 12. Since then, they have started to acquire Bitcoins steadily.
In addition to belonging to new investors, “young addresses” have another point in common. They are linked to wallets that receive many transactions but rarely send.
So we see a typical long-term investment pattern there. Chainalysis economist Philip Gradwell has a similar view.
“It looks like new people are entering the market, buying BTC and putting it in portfolios for long-term investment,” said Gradwell.
With an increase in demand and a reduced supply of Bitcoins, a price appreciation effect is expected.
“Overall, the data suggest that Bitcoin buying pressure is increasing and the supply available for purchase is decreasing, as new purchases are likely to be blocked for the long term,” said Gradwell.
At the time of writing, Bitcoin is trading at $ 10,71. However, he even surpassed US$ 11 thousand on Wednesday (16).
At the current price, Bitcoin has a 52% gain over the year.