On May 20, Cointelegrah reported that on-chain indicators such as Bitcoin MVRV Z-score, Puell Multiple and HODL Waves paint a bullish picture for Bitcoin investors. As analyst "ELI5 of TLDR" emphasized in an article on X on May 19, five on-chain indicators show that it has just begun, namely:
Bitcoin Market Dominance Exceeds 56%: Historically, cryptocurrency bull runs have started with high Bitcoin dominance, with most traders having sold out of their Altcoin during the previous bear cycle. According to TradingView, Bitcoin market dominance remains high at just over 56%. Bitcoin’s market share has been above 50% since October 2023.
Bitcoin MVRV Z-Score Below 6: Bitcoin’s MVRV Z-Score, which compares an asset’s current market value, or market cap, to its historical average, typically reaches around 6 during cycle peaks, according to a LookIntoBitcoin chart. It’s currently less than half that and hasn’t been above 6 since March 2021, according to LookIntoBitcoin.
Puell Multiple Has Not Reached 3 Yet: The Puell Multiple is another indicator that has aligned with cycle peaks but has yet to do so. The indicator is calculated by dividing the daily value of mined Bitcoin by the annual moving average of that value. The Puell Multiple fell below 1 after the April 20 halving, according to Coinglass. Peaks above 3 typically coincide with cycle tops and only reached 2.4 during the 2024 price rally in mid-March.
HODL Waves HODL Waves: A chart showing how much BTC is held by different groups based on HODL Waves is also bullish for Bitcoin, according to data from LookIntoBitcoin. Realized Cap HODL Waves provides a macro view of how much Bitcoin is held by those who recently bought compared to the previous period. The decline in the peak of the younger band suggests that selling pressure has been exhausted and there may be more room to rise.
Bitcoin Miner Revenue Per Hash: The fifth bullish on-chain metric is miner revenue per hash, which essentially shows how much money miners are making for their proof-of-work. While it will decline over time as network difficulty increases, ELI5 notes that the past two spikes to $0.3/terahash per second occurred at the peak of previous market cycles.
