Author: Bitcoin Magazine Pro
Translator: Bai Hua Blockchain
As Bit has now entered the six-digit range and become the norm, higher prices also seem to be a necessity. By analyzing key on-chain data, valuable insights can be provided on the basic health of the market. After understanding these indicators, investors can better predict price trends and prepare for potential market peaks or upcoming corrections.
1. Terminal Price
The "Terminal Price" indicator, which combines the Coin Days Destroyed (CDD) and the supply of Bit, has long been seen as an effective tool for predicting the peak of the Bit cycle. Coin Days Destroyed simply measures the activity level of Bit transactions, looking at both the length of time Bit is held and the amount of Bit involved in transactions.
Translator's note:
Terminal Price is an indicator used to predict the price peak of cryptocurrencies like Bit. It combines the supply of Bit and on-chain transaction data, such as Coin Days Destroyed (CDD), to assess market activity and investor behavior.
Coin Days Destroyed (CDD): Simply put, it looks at how long Bit has been held before being transferred, and also considers the amount transferred.
The role of Terminal Price: When the Terminal Price rises, it usually means the market is active or even overheated, and may be approaching the peak of the current bull market.
In simple terms, Terminal Price is like a "market thermometer" that helps investors determine if Bit is in the late stage of a bull market or about to enter a correction.
Figure 1: Bit's Terminal Price has broken above $185,000
Currently, Bit's Terminal Price has exceeded $185,000 and may continue to rise to $200,000 as the cycle develops. Given that Bit has broken above $100,000, this suggests that prices may continue to trend positively in the coming months.
2. Puell Multiple
The Puell Multiple compares the daily miner revenue (in USD) to its 365-day moving average. After the halving event, miner revenue dropped significantly, leading the market to enter a period of consolidation.
Figure 2: The Puell Multiple has risen back above 1.00
Currently, the Puell Multiple has risen back above 1, indicating that miner profitability is recovering. Historical data shows that breaking above this critical level often signals the late stage of a bull market cycle, often accompanied by exponential price increases. This pattern has been observed in all previous bull markets.
3. MVRV Z-Score
The MVRV Z-Score measures the relationship between market value and realized value (the average cost basis of Bit holders), providing a key market signal. To account for asset volatility, the indicator is standardized as a Z-score, and has shown high accuracy in identifying cycle tops and bottoms.
Figure 3: The MVRV Z-Score remains significantly below previous cycle peaks
Currently, Bit's MVRV Z-Score is around 3.00, not yet in the overheated red zone, indicating that the market still has room for growth. Although the trend of decreasing cycle peaks has become evident, the Z-Score shows the market is still some distance from reaching a state of frenzy.
4. Active Address Sentiment Index (AASI)
This indicator tracks the percentage change in active network addresses over a 28-day period and compares it to the concurrent price change. When price growth outpaces network activity, it suggests the market may be overbought in the short term, as positive price performance is unlikely to be sustained without sufficient network utilization.
Figure 4: AASI showed signs of overheating when Bit broke above $100,000
The latest data shows that after Bit's rapid rise from $50,000 to $100,000, the market has experienced a slight cooling, indicating a healthy consolidation period. This adjustment may lay the foundation for long-term sustained growth and does not mean we should be pessimistic about the medium to long-term trend.
5. Spent Output Profit Ratio (SOPR)
The Spent Output Profit Ratio (SOPR) measures the profitability of Bit transactions. Recent data shows an increase in realized gains, which may indicate we are entering the late stage of the cycle.
Figure 5: Clustering of SOPR suggests increased profit-taking
It's worth noting that the use of Bit ETFs and derivatives is increasing. Investors may be shifting from self-custody to using ETFs for convenience and tax benefits, which could impact SOPR values.
6. Value Days Destroyed (VDD)
The Value Days Destroyed (VDD) multiple builds upon the Coin Days Destroyed (CDD) by adding more weight to long-term large holders. When this indicator enters the overheated red zone, it usually signals that prices have reached a major peak, as the most experienced large participants in the market start to cash out and exit.
Figure 6: VDD is at a relatively high but not yet overheated level
The current Bit VDD level shows the market is slightly overheated, but historical data suggests this range may persist for months before reaching the peak. For example, in 2017, VDD was showing overbought signals nearly a year before the cycle top arrived.
7. Conclusion
In summary, these indicators suggest that Bit is gradually entering the late stage of the bull market. While some indicators show short-term cooling or mild overbought conditions, most still highlight the significant upside potential during the 2025 period. The key resistance levels for this cycle may be in the range of $150,000 to $200,000, and indicators like SOPR and VDD will provide clearer signals as we approach the peak.
Link to the article: https://www.hellobtc.com/kp/du/12/5597.html
Source: https://bmpro.substack.com/p/where-are-we-in-this-bitcoin-cycle?utm_source=%2Finbox&utm_medium=reader2
