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Recent on-chain data from CryptoQuant reveals a unique opportunity in the Bitcoin market that appears only once within a bull cycle. Miners’ profitability is showing patterns similar to those before significant price surges in past bull markets. Could this indicate the end of the current correction period and the start of a new bull rally?
Key Indicators for Market Bottoms
CryptoQuant’s analyst Crypto Dan points to an important indicator that is typically used to find the bottom of a bear market. However, it also proves useful for predicting the end of correction periods within bull markets.
An opportunity that comes once within a bull cycle“This indicator fell significantly during the bull cycle in 2016 and 2020, followed by the beginning of #Bitcoin's strong rise. Currently, similar movements have been detected.” – By @DanCoinInvestor Link … pic.twitter.com/TAIzSbwio3
— CryptoQuant.com (@cryptoquant_com) July 9, 2024
The red-circled areas in the data illustrate instances where miners’ profitability dropped sharply within a bull cycle, leading to a significant price increase in Bitcoin. In both 2016 and 2020, this indicator fell substantially, followed by the start of Bitcoin’s powerful upward movement.
In both 2016 and 2020, this indicator fell substantially, followed by the start of Bitcoin’s powerful upward movements. These patterns were observed during previous bull cycles, suggesting a similar trend might be underway.
Looking back at previous bull cycles, similar patterns were observed in 2016 and 2020. Although pinpointing the exact end of the adjustment period is challenging, the data suggests that it is not far away. The current trend indicates that we may witness the beginning of a new bull rally within the Q3 of 2024.
Decline In Bitcoin Holding Wallet
Blockchain analytical platform Santiment has revealed a recent decline in the number of non-empty Bitcoin wallets, which now stand at 54.09 million. Since June 15, there has been a net decrease of 566,000 wallets.
There are currently 54.09M non-empty Bitcoin wallets on the network, dropping by a net of 566K since June 15th. Patient bulls should be pleased with this, as self-liquidating wallets from impatient non-believers is a sign of FUD-causing bottoms, just like we saw in January. pic.twitter.com/h2jK9YvCf9
— Santiment (@santimentfeed) July 9, 2024
Santiment suggests that this reduction is a positive sign for patient investors. The drop in wallets is largely due to liquidation by impatient holders, often referred to as “weak hands.”
132X Return For Investor Ahead
Additionally, Santiment reports that both the 30-day and 365-day Bitcoin Market Value to Realized Value (MVRV) indicators are currently in negative territory. This signals a buying opportunity, as it shows that current purchases are being made when other traders are experiencing losses.
However, further Santiment notes that the last time both MVRV ratios were negative, investors who bought Bitcoin at the time saw a 132% return.
As of now, bitcoin price is trading at $57,249, reflecting a surge of 0.4% in the last 24 hours.