With Bitcoin now making six-figure territory feel normal and higher prices are inevitable, analyzing key on-chain data provides valuable insights on the fundamental health of the market. By understanding these metrics, investors can better anticipate price movements and prepare for potential market peaks or even any upcoming trends.
Terminal Price
The Terminal Price metric, which includes the Dog Days Destroyed (CDD) while it includes Bitcoin supply, it has historically been a reliable indicator for predicting Bitcoin cycle peaks. Days of Coins Destroyed calculates the speed of the coins being transferred, considering both the holding time and the amount of Bitcoin transferred.
Currently, the closing price has crossed $185,000 and is likely to rise to $200,000 as the cycle progresses. With Bitcoin already breaking $100,000, this suggests that we may still have several months of positive price action ahead of us.
Many girls
The Many Puells evaluates a miner's daily income (in USD) compared to its 365-day moving average. After the semi-buyout event, miners experienced a significant drop in income, creating a period of consolidation.
Now, the Puell Multiple has risen back above 1, signaling a return to profitability for miners. Historically, crossing this threshold has marked the later stages of a bull cycle, often marked by exponential price rallies. A similar pattern has been observed in all previous bull runs.
MVRV Z-Score
The MVRV Z-Score measuring the market value compared to the realized value (the average cost base of Bitcoin holders). Adjusted to a Z Score to account for the volatility of the asset, it has been very accurate in identifying cycle peaks and troughs.
Currently, Bitcoin's MVRV Z-Score is still below the overheated red zone with a value of around 3.00, indicating that there is still room for growth. Although reduced peaks have been a trend in recent cycles, the Z-Score suggests that the market is far from reaching a euphoric peak.
Active Address Sensing
This metric tracks 28-day percentage change in active network addresses along with the price change over the same period. When price growth exceeds network activity, it suggests that the market may be overbought in the short term, as the positive price action may not be sustainable as the network uses .
Recent data shows a slight cooling after Bitcoin's rapid climb from $50,000 to $100,000, indicating a period of healthy consolidation. This pause seems to set the stage for long-term sustained growth and does not indicate that we should be bearish in the medium to long term.
Consumed product profit ratio
The Consumed Product Profitability Ratio (SOPR) measures brought about profits from Bitcoin transactions. Recent data shows an increase in profit taking, perhaps indicating that we are entering the final stages of the cycle.
One caveat to consider is the growing use of Bitcoin ETFs and derivative products. Investors may be switching from self-storage to ETFs for ease of use and tax benefits, which may affect SOPR values.
Value Days Destroyed
Value Days Destroyed (VDD) Multi expanding CDD by emphasizing larger, long-term holders. When this metric enters the overheated red zone, it often signals major price peaks as the largest and most experienced market participants begin to cash in. out
While Bitcoin's VDD levels are currently showing a slightly overheated market, history suggests that it could maintain this range for months too high. For example, in 2017, VDD indicated overbought conditions almost a year before the top of the cycle.
Decision
Taken together, these metrics suggest that Bitcoin is entering the final stages of its bull market. While some indicators point to a short-term cooling or slight over-expansion, most indicate upside through 2025. Key resistance levels for this cycle could appear between $150,000 and $200,000 , with metrics like SOPR and VDD giving clearer signals as we approach the peak.
For a more in-depth look at this topic, check out a recent YouTube video here: What's Happening on Chain: Bitcoin Update
Disclaimer: This newsletter is for information purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
