Author: Matt Crosby, Bitcoin Magazine; Translated by: Deng Tong, Golden Finance
With six-figure Bitcoin prices becoming the norm and higher prices seemingly inevitable, analysis of key on-chain data provides valuable insights into the underlying health of the market. By understanding these indicators, investors can better predict price action and prepare for potential market peaks and even any upcoming retracements.
Terminal price
The Terminal Price Indicator combines Days Destroyed (CDD) with Bitcoin’s supply, and has historically been a reliable indicator for predicting Bitcoin cycle peaks. CDD measures the speed at which tokens are transferred, taking into account both holding time and the amount of Bitcoin being moved.
Figure 1: Bitcoin's terminal price has exceeded $185,000.
Currently, the terminal price has exceeded $185,000 and may rise to $200,000 as the cycle progresses. Since Bitcoin has already surpassed $100,000, it suggests that we may still have several months of positive price movement ahead.
PUELL Multiple
The Puell multiple assesses miners' daily income (in USD) relative to their 365-day moving average. After the halving event, miners' income sharply declined, leading to a consolidation period.
Figure 2: The Puell multiple has risen above 1.00.
Currently, the Puell multiple has risen above 1, indicating that miners will return to profitability. Historically, exceeding this threshold signals that the bull market cycle has entered its later stages, typically marked by exponential price increases. Similar patterns have been observed in all previous bull markets.
MVRV Z Score
The MVRV Z score measures the market value relative to the actual value (average cost basis of Bitcoin holders). Standardized to Z-score to account for asset volatility, it is very accurate in identifying cyclical peaks and troughs.
Figure 3: MVRV-Z score remains far below previous peaks.
Currently, Bitcoin's MVRV Z value is still below the overbought red zone, at around 3.00, indicating that there is still room for growth. Although the decline in peaks is a trend observed in recent cycles, the Z value suggests that the market is far from euphoric peaks.
Active Address Sentiment
This metric tracks the percentage change in active network addresses over 28 days and the corresponding price change. When price growth exceeds network activity, it indicates that the market may be overbought in the short term, as positive price trends may not be sustainable considering network utilization.
Figure 4: AASI indicates overheating above $100,000.
Recent data shows that after Bitcoin rapidly climbed from $50,000 to $100,000, the market has slightly cooled down, indicating that it is in a healthy consolidation phase. This pause could lay the groundwork for sustained long-term growth and does not suggest that we should take a pessimistic view in the medium to long term.
Spent Output Profit Ratio
Spent Output Profit Ratio (SOPR) measures the realized profits of Bitcoin transactions. Recent data shows an increase in profit-taking, which may indicate that we are entering the later stages of the cycle.
Figure 5: SOPR large-scale profit-taking cluster.
One issue to consider is the increasing use of Bitcoin ETFs and derivatives. Investors may shift from self-custody to ETFs for ease of use and tax advantages, which may affect SOPR values.
Value Destruction Days
Value Destruction Days (VDD) multiple expands CDD by weighting larger long-term holders. When this metric enters the overbought red zone, it usually signals a significant price peak, as the largest and most experienced participants in the market begin to cash out.
Figure 6: VDD is somewhat hot, but not too hot.
Although Bitcoin's current VDD level suggests the market is slightly overheated, history indicates that Bitcoin may maintain this range for several months before reaching a peak. For example, in 2017, VDD indicated overbought conditions nearly a year before the cycle peaked.
Summary
Taken together, these indicators suggest that Bitcoin is entering the later stages of a bull market. While some indicators suggest a cooling off or slight overexpansion in the short term, most indicators indicate that there is still considerable upside potential throughout 2025. Key resistance levels for this cycle may appear between $150,000 and $200,000, and as we approach the peak, indicators like SOPR and VDD will provide clearer signals.
