Translation: Plain Language Blockchain
As Bitcoin now regularly enters six-figure territory, higher prices seem inevitable. By analyzing key on-chain data, valuable insights can be provided regarding the fundamental health of the market. Understanding these indicators allows investors to better predict price trends and prepare for potential market peaks or upcoming corrections.
1. Terminal Price
"Terminal Price" indicator combines Coins Destroyed Days (CDD) and Bitcoin's supply and has been regarded as an effective tool for predicting Bitcoin cycle peaks. Coins Destroyed Days simply measures the activity level of Bitcoin transactions, considering both the duration of holding and the amount of Bitcoin involved in transactions.
Translator's Note:
Terminal Price is an indicator used to predict price peaks for Bitcoin and other cryptocurrencies. It combines Bitcoin's supply and on-chain transaction data, such as Coins Destroyed Days (CDD), to assess market activity and investor behavior.
Coins Destroyed Days (CDD): Simply put, it looks at how long Bitcoin has been held before being transferred, while also considering the amount transferred.
Role of Terminal Price: When the terminal price rises, it usually indicates a hot market with active trading, possibly nearing the peak of the current bull market.
In simpler terms, the Terminal Price acts as a "market thermometer," helping investors determine whether Bitcoin is in the late stage of a bull market or nearing a correction phase.
Figure 1: Bitcoin's Terminal Price has surpassed $185,000
Currently, Bitcoin's Terminal Price has surpassed $185,000 and may further rise to $200,000 as the cycle progresses. Given that Bitcoin has broken through $100,000, it indicates that prices may continue to maintain an upward trend in the coming months.
2. Puell Multiple
The Puell Multiple is assessed by comparing daily miner revenue (in USD) to its 365-day moving average. After the halving event, miner revenue dropped significantly, leading the market into a consolidation phase.
Figure 2: Puell Multiple has risen above 1.00
Currently, the Puell Multiple has risen back above 1, indicating that miner profitability is recovering. Historically, breaching this threshold often signals the late stage of a bull market cycle and is frequently accompanied by exponential price increases. This pattern has been observed in all previous bull markets.
3. MVRV Z Score
MVRV Z Score provides key market signals by measuring the relationship between market value and realized value (the average cost basis of Bitcoin holders). To account for asset volatility, this indicator is standardized to a Z score, exhibiting high accuracy in identifying cycle peaks and troughs.
Figure 3: MVRV Z Score is still significantly below previous cycle peaks
Currently, Bitcoin's MVRV Z Score is approximately 3.00 and has not entered the overheating red zone, indicating that the market still has room for growth. Although the trend has been a gradual decrease in recent cycle peaks, the Z score shows that the market still has a way to go before reaching a frenzy peak.
4. Active Address Sentiment
This indicator tracks the percentage change of active network addresses over 28 days and compares it with price changes during the same period. When price growth exceeds network activity, it suggests the market may be overbought in the short term, as positive price performance may be difficult to sustain under low network utilization.
Figure 4: AASI shows signs of overheating as Bitcoin surpasses $100,000
Recent data shows that after Bitcoin rapidly rose from $50,000 to $100,000, the market experienced slight cooling, indicating a healthy consolidation period. This adjustment may lay the groundwork for sustained long-term growth and does not imply that we should be pessimistic about medium to long-term trends.
5. Spent Output Profit Ratio (SOPR)
Spent Output Profit Ratio (SOPR) measures the profits realized in Bitcoin transactions. Recent data shows an increase in profit-taking behavior, which may indicate we are entering the late stage of the cycle.
Figure 5: A large accumulation of SOPR indicates profit-taking behavior
One point to note is the increasing use of Bitcoin ETFs and derivatives. Investors may be shifting from self-custody to using ETFs in pursuit of convenience and tax advantages, which could impact SOPR values.
6. Value Destroyed Days (VDD)
The Value Destroyed Days (VDD) multiple adds weight to long-term large holders based on Coins Destroyed Days (CDD). When this indicator enters the overheating red zone, it typically indicates that prices have reached a major high, as the most experienced large participants in the market begin to cash out.
Figure 6: VDD is at a high but not yet overheating level
The current VDD level of Bitcoin indicates the market is slightly overheated, but history shows that this range may persist for months before peaking. For example, in 2017, VDD showed signs of being overbought nearly a year before the cycle peak.
7. Conclusion
Overall, these indicators suggest that Bitcoin is gradually entering the late stage of a bull market. Although some indicators show short-term cooling or slight overbought conditions, most highlight substantial upside potential during 2025. Key resistance levels for this cycle may be between $150,000 and $200,000, with indicators like SOPR and VDD providing clearer signals as we approach the peak.
