Bitcoin price trades strongly above the $20,000 psychological level and shows signs of another upside move above $21K. Five on-chain indicators also signal that Bitcoin has entered an early bull market cycle.
The crypto market recovered slightly after the U.S. DOJ enforcement action against Russian crypto exchange Bitzlato. Crypto Twitter blames DOJ for creating much hype surrounding small news that caused panic selling across the crypto market.
Five On-Chain Indicators Indicate More Upside in Bitcoin Price
According to on-chain data by CryptoQuant, Bitcoin price has entered the early bull market cycle and is likely to move higher with promising momentum in the next few days.
Bitcoin movements from spot to derivative exchanges have increased as investors started taking risks. Traders generally transfer their coins to derivative exchanges to increase their market upside exposure. It helps them make more profits during a market recovery.
The MVRV Ratio indicates if the Bitcoin price is undervalued or overvalued. It is derived from Bitcoin’s market capitalization (market price) divided by its actual market capitalization. Currently, MVRV is 1.07 and moving near the 365-day moving average (orange line). Thus, it indicates Bitcoin is about to start a new uptrend.
Third indicator, the Net Unrealized Profit/Loss shows the average profit margin of Bitcoin holders. It is also near the 365-day moving average and indicates an early bull market cycle.
Puell Multiple is the ratio of the daily dollar worth of newly issued bitcoins to their one-year moving average. At present, the indicator shows a shift to a positive trend as Bitcoin price holds strongly above its 365-day moving average.
CryptoQuant’s P&L Index indicator combines the MVRV ratio, Net Unrealized Profit/Loss, and LTH/STH SOPR into a single Bitcoin value indicator. The P&L Index points to an early Bitcoin bull market cycle as the index (dark purple line) looks to cross the 365-day moving average (light purple line)
BTC Price Await Upside Momentum
Bitcoin (BTC) price fell nearly 2% in the last 24 hours, with the price currently trading at $20,774. The 24-hour low and high are $20,541 and $21,564, respectively. Furthermore, the trading volume has increased by 21% in the last 24 hours, indicating an increase in interest.
Traders should keep an eye on the US dollar index (DXY). A fall in the DXY below 102 at current market conditions will confirm a rally in Bitcoin price.
