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 it may rise to $200,000 as the cycle progresses. Since Bitcoin has already broken through $100,000, this suggests that we may still have several months of positive price action ahead.
PUELL Multiple
The Puell multiple assesses miners' daily revenue (in USD) relative to their 365-day moving average. After the halving event, miner revenue sharply declined, leading to a period of consolidation.
Figure 2: The Puell multiple has risen above 1.00.
Now, the Puell multiple has risen above 1, indicating that miners will return to profitability. Historically, exceeding this threshold signifies that the bull market cycle has entered its later stages, typically marked by exponential price increases. A similar pattern has been observed in all previous bull markets.
MVRV Z Score
The MVRV Z score measures the market value relative to the actual value (the average cost basis of Bitcoin holders). It is standardized as a Z score to account for asset volatility, and it is very accurate in identifying cycle peaks and troughs.
Figure 3: The MVRV-Z score is still far below previous peaks.
Currently, Bitcoin's MVRV Z value is still below the overheating red zone, around 3.00, indicating that there is still room for growth. Although the decline in peaks has been a trend in recent cycles, the Z value suggests that the market is far from reaching an exhilarating peak.
Active Address Sentiment
This indicator tracks the 28-day percentage change in active network addresses alongside price changes during the same period. When price growth exceeds network activity, it suggests 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 that situations above $100,000 are overheated.
Recent data shows that after Bitcoin rapidly climbed from $50,000 to $100,000, the market has slightly cooled, indicating that the market is in a healthy consolidation phase. This pause may lay the groundwork for sustained long-term growth and does not imply that we should adopt a pessimistic view in the medium to long term.
Spent Output Profit Ratio
The Spent Output Profit Ratio (SOPR) measures the realized profits from 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 mass 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 benefits, which could impact SOPR values.
Value Destruction Days
The Value Destruction Days (VDD) multiple extends CDD by weighting larger long-term holders. When this indicator enters the overheating red zone, it usually signals a significant peak in price, 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 shows that Bitcoin may sustain this range for months before reaching a peak. For example, in 2017, VDD indicated overbought status nearly a year before the cycle peaked.
Summary
Overall, these indicators suggest that Bitcoin is entering the late stages of a bull market. While some indicators suggest a cooling off or slight overextension in the short term, most indicators indicate that there is still considerable upside throughout 2025. Key resistance levels for this cycle may appear between $150,000 and $200,000, and as we approach the peak, indicators such as SOPR and VDD will provide clearer signals.
