Previous on-chain research suggested the Bitcoin market bottom was in. CryptoSlate revisited several Glassnode metrics, which continue to indicate a bottoming of price.
However, macro factors, which may not have been present in previous cycles, remain in play, potentially impacting the current cycle.
Bitcoin Supply P/L Bands
Bitcoin Supply P/L Bands show the circulating supply that is either in profit or loss, based on the price of the token being higher or lower than the current price at the time of last moving.
Market cycle bottoms coincide with the Supply in Profit (SP) and Supply in Loss (SL) lines converging, which happened most recently around Q4 2022. The subsequent act of the lines diverging has corresponded with price reversals in the past.
Currently, the SP band has moved up sharply to diverge from the SL band, suggesting a macro upturn in price could be on the cards if the pattern holds.
Market Value to Realized Value
Market Value to Realized Value (MVRV) refers to the ratio between the market cap (or market value) and realized cap (or the value stored). By collating this information, MVRV indicates when the Bitcoin price is trading above or below “fair value.”
MVRV is further split by long-term and short-term holders, with Long-Term Holder MVRV (LTH-MVRV) referring to unspent transaction outputs with a lifespan of at least 155 days and Short-Term Holder MVRV (STH-MVRV) equating to unspent transaction lifespans of 154 days and below.
Previous cycle bottoms featured a convergence of the STH-MVRV and LTH-MVRV lines, with the former crossing above the latter to signal a bullish reversal in price.
During Q4 2022, a convergence between the STH-MVRV and LTH-MVRV lines occurred. And, within recent weeks, the STH-MVRV has crossed above the LTH-MVRV, signaling the possibility of a price trend reversal.
Young Supply Last Active < 6m & Holders in Profit
Young Supply Last Active <6m (YSLA<6) refers to Bitcoin tokens that have transacted within the last six months. The opposing scenario would be long-term holders sitting on their tokens and not actively participating in the Bitcoin ecosystem.
At bear market bottoms, YSLA<6 tokens account for less than 15% of the circulating supply as non-believers/hit-and-run speculators leave the market during the cycle of depressed prices.
The chart below shows YSLA<6 tokens reached the “less than 15% threshold” late last year, suggesting a capitulation of speculative interest.
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