On-chain data suggests that Bitcoin is staging a recovery similar to December 2018 and March 2020.
Bitcoin is still below a key moving average, and that is “not a bullish sign,” says a new report, but signs of a rebound have finally arrived.
In its latest market update released on Friday, trading suite Decentrader highlighted three on-chain indicators calling for an imminent bullish rally for BTC/USD
Bitcoin has now spent almost a month below its 200-day moving average (DMA). This is concerning, Decentrader warns, and external factors such as geopolitical sentiment continue to weigh on sentiment.
Fortunately, however, several measures of on-chain strength now suggest that the bounce from a bearish phase within an overall bull market is now underway. These are well-known — active addresses, sentiment, spent output profit ratio (SOPR) and stock-to-flow deviation.
Active addresses, meanwhile, measure whether Bitcoin is overbought or oversold at a certain price point relative to the number of active addresses on the blockchain.
Like SOPR, the indicator is currently in the same position as just after the bear market floor in December 2018 and the crash of March 2020.
Also on the cards is a rally back to the stock-to-flow trajectory line of $85,000 in the coming months, something that its creator, PlanB, said would pose a “surprise” were it not to happen.