Bitcoin on-chain metrics are now bullish: Bitfinex

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  • Bitfinex market report points to bullish metrics for BTC
  • Take Profit, the Bitcoin Realized HODL (RHODL) multiple and the Reserve Risk Ratio are all glowing green.
  • Bitcoin is trading above $23k again after slipping on Monday following the broader market reaction to the economic news.

Bitcoin It is trading around $23,360 at the time of writing, up nearly 2.4% over the past 24-hours as the cryptocurrency flashed green on Tuesday amid improving market sentiment.

For the world’s leading cryptocurrency by market cap, it appears that on-chain metrics are ticking north to suggest a strong bullish case.

Supply up to 20% in profit, buy signal

According to analysts at Bitfinex, one of bitcoin’s on-chain metrics is suggesting fresh upside momentum is a potentially take-in-profits indicator. The data shows that the bulls successfully absorbed the selling pressure in the short term and some long term HODLers turned profitable.

Analysts observing the metric over a 90-day time frame highlighted a 20% jump in January 2023 for the “Profit in Supply” chart. reports Released on Monday.

,This implies that large and long term investors are currently profitable on on-paper spot positions. This is healthy for the latter half of a bear market as a 30-day continuous uptrend following a broad drawdown on this indicator has historically provided a good buy signal for the following two years.,” said the Bitfinex team.

As far as the markets are concerned, the above scenario does not mean that the crypto market is set to go “only up”. However, the outlook suggests that bulls have the upper hand in the spot markets, a scenario that has historically characterized “late bear and early bull markets”.

The Bitcoin Realized HODL (RHODL) multiple, historically even bullish, has also been in a bullish trend. As per the data, the RHODL multiplier has remained positive over the 90-day period, suggesting profitability for HODLers.

Key Metrics Suggest 10x Bounce for BTC Price

Apart from the 90-day EMA, other technical indicators flipping green include the Net Adjusted Expense Output Profit Ratio. According to on-chain data, the indicator is currently above one, which suggests net sales are profitable in the bitcoin market.

Also, the Realized Profit to Loss (RPLR) ratio is above zero, which also confirms the profitable selling seen in the past few weeks. The metric is currently trending towards 0.2, a reading comparable to the RPLR measure taken in 2019 when the bitcoin price fell to a low of $3,600. After the RPLR hit 0.2, BTC price turned green and surged 19x, reaching its all-time high in November 2021.

bitcoin realized profit loss ratio chart glassnode

When bitcoin fell to a low of $16,000, the metric approached this ratio, the potential for another 10x rally could see BTC target highs of $160,000 over the next two-three years.

Bitcoin’s Reserve to Risk Ratio Suggests High HODealer Confidence

Looking at a longer time frame, Bitcoin’s on-chain metrics are also pointing to a bullish outlook. One of these technical indicators is the reserve risk ratio.

According to on-chain analytics platform Glassnode, bitcoin’s reserve to risk ratio has hit an all-time low. Analysts at Bitfinex noted that this puts the metric lower than market lows in 2019 or 2020.

As the ratio is a cyclical oscillator that highlights value versus HODLer conviction, a very low ratio translates to a high conviction among investors, with the incentive to sell factoring in against the opportunity cost.

A positive outlook for bitcoin is also seen in the Market Value to Realized Value (MVRV) ratio, which has historically recovered and often coincides with bullish returns.

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