Bitcoin Bottoms Out: On-Chain Metrics Show Bullish Case

• This article examines the on-chain metrics associated with a potential bottom in bitcoin price.
• Market extremes are where these indicators have proven to be most useful, and current signs suggest a classic bottom could be forming.
• However, this could still be another bear market rally and readers need to consider other macroeconomic factors.

On-Chain Bottom Indicators

This week’s dashboard release highlighted some key on-chain metrics we like to track in order to analyze potential bottoms in Bitcoin price. By looking at market extremes — tops and bottoms — we can better understand when these indicators prove most useful. On-chain indicators overlaid with previous Bitcoin price bottoms give us an understanding of where various cohorts of the market are in profit or underwater.

Realized Price for Short and Long Term Holders

By viewing the transparent nature of Bitcoin ownership, we can get a better picture of the realized price for the average holder as well as both short-term (STH) and long term holders (LTH). On a monthly basis, realized losses have flipped to realized gains across all three cohorts discussed above which is a sign that capitulation has clearly taken place and HODLers held their position.

Tail Risk

A major tail risk is a possible selloff in risk assets due to incorrect expectations of Federal Reserve policy pivot this year. Many economic indicators point towards the likelihood that we’re still in the midst of a bear market similar to 2000-2002 or 2007-2008, meaning worse may yet come before any recovery.


Overall from a Bitcoin native perspective it appears capitulation has unfolded and HODLers held their position despite macroeconomic risks looming large. If prices sustain above $20,000 in the short term then bullish metrics present an encouraging sign for more long term accumulation here.

Actionable Advice

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