Introduction:
In the world of cryptocurrency, skepticism and fear of uncertainties are common. However, ignoring fundamental on-chain data would be a mistake. Let's examine two crucial on-chain datasets, the MVRV (Market Value to Realized Value) and Average Realized Price, to gain insights into Bitcoin's current market phase.
Short-Term Supply Groups (1 day to 6 months):
a. Historical Bear Market Behavior:
During bear markets, #Bitcoin market price consistently remains below the 1D-6M Average Realized Price, acting as absolute resistance. Conversely, during recovery phases transitioning to a bull market, this level becomes a solid support, aiding in price recovery.
b. Short-Term MVRV (1D-6M) Indicator:
The Short-Term #MVRV (1D-6M) acts as the boundary between bullish and bearish sentiment. Whenever Bitcoin's price approaches this indicator, positive responses are observed, reinforcing its significance in price movements.
Medium-Term Supply Groups (6 months to 2 years):
a. Confirming Bull Market Phases:
Similar to short-term analysis, the Medium-Term Average Realized Price plays a crucial role in confirming bull markets. For Bitcoin to enter a #BullMarket officially, it requires a sufficient accumulation period to gather momentum and break through this mid-term resistance.
b. Medium-Term MVRV (6M-2Y) Indicator:
As with its short-term counterpart, the Medium-Term MVRV (6M-2Y) indicator serves as the boundary separating bearish and bullish conditions.
Current Market Analysis:
At present, we observe similarities between the current market phase and the recovery phase around late 2015 and early 2016. For Bitcoin to solidify its return to a bull market, it needs a prolonged accumulation period to overcome the medium-term average realized price resistance.
On-Chain Data:
Short-Term Supply Group Data:
STH Avg Realized Price: $28,000
STH MVRV: 1.04
Medium-Term Supply Group Data:
Medium-term Avg Realized Price: $30,300
Medium-term MVRV: 0.96
Conclusion:
Considering the historical behavior of Bitcoin's market phases based on the MVRV and Average Realized Price, the current data indicates a potential recovery phase and an impending return to the bull market. However, a sustained accumulation period is necessary to gain enough momentum to overcome the medium-term resistance. Monitoring short-term data for positive responses can provide additional insight into Bitcoin's price movements during this crucial juncture. As always, on-chain data should not be ignored as it provides valuable insights into the cryptocurrency market's underlying fundamentals.
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Source:- CryptoQuant
