After Bitcoin surpassed $108,000, a price correction occurred. While most market participants don’t see this as the end of the bull cycle, concerns are rising about whether a prolonged correction phase, similar to the six-month period starting in March, could repeat. In this analysis, we examine the current market phase using key on-chain indicators.
The Adjusted SOPR (Spent Output Profit Ratio) removes short-term noise by excluding transactions under one hour and applies a 7-day Simple Moving Average (SMA) for clarity. Currently, the SOPR (7-SMA) is above 1 but trending downward, indicating decreasing profits for market participants. Historically, when SOPR drops below 1, Bitcoin often rebounds as selling at a loss triggers reversals—common in bull market patterns.(Chart1)
The Miner Position Index (MPI), analyzed with a 7-day SMA, reveals miner behavior regarding Bitcoin sales. Historically, miners sell before halving events or near cycle peaks. Currently, MPI is trending downward, with no signs of mass transfers to exchanges. This suggests that large mining firms are holding Bitcoin as part of their assets. However, periodic sell-offs for operational costs are expected to continue.(Chart2)
Total network fees, viewed with a 7-day SMA, reflect transaction activity. Fees are currently declining, signaling reduced on-chain activity and a cooling phase. This indicates market overheating is subsiding.(Chart3)
Funding rates have turned downward. In this cycle, Bitcoin has frequently rebounded from extreme funding rate drops, especially during negative funding periods. If funding rates continue to decline and market sentiment turns bearish, another rebound could follow.(Chart4)
On-chain data suggests the bull market is still intact, and the current phase appears to be a cooling-off period rather than a cycle peak. However, short-term price movements remain unpredictable. Investors should maintain a strategic, disciplined approach, avoid market noise.
Written by Avocado_onchain
