February 3, 2023

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Six on-chain metrics that indicate Bitcoin is a 'buying opportunity for future generations'

Six on-chain metrics that indicate Bitcoin is a ‘buying opportunity for future generations’

Many on-chain metrics of Bitcoin (BTC) The grid flashes buy signals after this year’s rally.

Bitcoin has come out of its slumber, posting a 37% gain since the beginning of 2023. However, On-chain data It still notes that it could be a “generational buying opportunity,” according to analysts.

On January 24, researcher and tech analyst Game of Trades outlined six on-chain metrics to his 71,000 Twitter followers.

The first metric is an accumulation trend score that highlights areas of heavy accumulation in terms of entity size and number of coins purchased.

“Large entities have been in deep accumulation mode since the FTX crash,” the analyst noted, adding that “similar accumulations occurred at the bottom of 2018 and 2020.”

The adjusted sleep flow of a Bitcoin entity is a measure of the ratio of the current market capitalization and the annual sleep value.

When the dormant value exceeds the market value, the market can be considered to be in complete capitulation which has historically been a good buy area.

According to Glassnode, this metric fell to an all-time low in 2022.

BTC Entity – Modified Sleep Flow. Image: Glassnode

Bitcoin reserve risk can be used to measure the long-term confidence of holders in the price of BTC. This also fell to an all-time low at the end of 2022, according to Glassnode data.

Bitcoin’s Realized Price (RP) is the value of all the coins in circulation at the price they last moved – in other words, an estimate of what the entire market paid for their coins.

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to me Wu schemesBitcoin has been trading below this level ever since FTX breakdown in November until January 13th. It is currently slightly above the RP, which represents another buying opportunity.

The Bitcoin MVRV Z-Score shows when a BTC is over or undervalued relative to its “fair value” or realized price. When the metric leaves the undervalued area, it is often considered the end of a bear market.

MVRV Z- BTC Points. Image: Glassnode

Finally, there is the Puell Multi which studies the fundamentals of mining profitability and its impact on market cycles.

Lower values, as they are at the moment, indicate miner fatigue and represent long-term buying opportunities.

Related: Bitcoin halts volatility at $23k as BTC traders see a collective return of profit

The analyst concluded that these six on-chain metrics “indicate an exceptional risk-reward setup in Bitcoin.”

They added that all metrics are at similar levels to the market cycle bottoms in 2015, 2018 and 2020.

At press time, BTC is trading down over 1.9% over the past 24 hours at $22,675, according to Cointelegraph. data.