Bitcoin On-Chain Momentum Bullish Again, Traders May Push Prices Higher
While some analysts are still expecting Bitcoin (BTC) to fall further, it appears that fundamentals and on-chain metrics are starting to imply bulls have the upper hand.
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Bitcoin Preparing to Head Higher Ahead of Halving
Adaptive Capital partner Willy Woo recently noted that on-chain momentum, which the popular analyst has long claimed is correlated with Bitcoin’s macro price trends, is “crossing into bullish” territory after a multi-month downturn.
Woo didn’t give the name of the indicator he was using or the indicator’s details, as “they’re proprietary” to his fund, though the on-chain analyst asserted that investor momentum is starting to turn bullish.
With this in mind, he asserted that the “bottom is most likely in,” meaning that any move lower than the $6,500 plunge “will be just a wick in the macro view.” He added that the unnamed indicator also implies that cryptocurrency investors will start to front-run the impending “halving,” the block reward reduction that will be taking place in May 2020.
On-chain momentum is crossing into bullish. Prep for halvening front running here on in. Can't say what this indicator is, as it's proprietary to @AdaptiveFund, but it tracks investor momentum. The bottom is mostly likely in, anything lower will be just a wick in the macro view. pic.twitter.com/WqiPRpweUv
— Willy Woo (@woonomic) December 7, 2019
Woo isn’t the only one noticing that BTC’s on-chain metrics are starting to favor bulls.
Philip Swift, the founder of cryptocurrency analytics site Look Into Bitcoin, recently posted a 10-part thread in which he noted that Bitcoin’s price bias remains positive due to a confluence of factors.
One such factor was that Bitcoin’s Network Momentum indicator, which tracks the movement of coins to determine the usage of the network, has begun to trend higher, bouncing off bear market levels. This is something often seen six to 10 weeks prior to the beginning of a bull market, Swift remarked.
4/ Also keep an eye on Bitcoin Network Momentum
At this point in prior cycles, we saw rapid increases in on-chain BTC volumes for 6-10wks b4 bull market started
Worth watching for now to see if this repeats following recent uptick@woonomic version with coinmetrics data is
pic.twitter.com/xLXSTU1JE2
— Philip Swift (@PositiveCrypto) December 5, 2019
There’s also Glassnode, a crypto-centric on-chain intelligence firm, which noted just recently that their metrics suggest that Bitcoin is bottoming and slated to revert higher in a “strong” fashion.
One such metric that Glassnode drew attention to was that the Market Value to Realized Value (MVRV), the ratio between market cap and realized cap, is “consolidating towards one,” which implies that gains are being realized by crypto asset investors. A reading of one for the ratio often marks a bottom for the cryptocurrency market.
Related Reading: Researcher: Bitcoin is Alive and Well, Price Still in Macro Uptrend
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Nick Chong, Khareem Sudlow