After a rally from $3,700 to $10,000 in a matter of months, Bitcoin’s upward trend has paused over recent weeks.
BTC’s inability to continue to surge higher has left some expecting downside.
On-chain data, however, tells a bullish story.
ON-CHAIN DATA SHOWS BITCOIN IS IN A MACRO “BUY” ZONE
Ki Young Ju shared the chart below on July 13th. It shows that one of his company’s indicators suggests that because Bitcoin is in accumulation.
“We are in the #BTC accumulation phase. The 30- and 90-day moving average gap of all exchanges’ reserve represents the downside risk. It hit a record low in May this year and is still below zero.”
He explained that since 2015, whenever this indicator has signaled accumulation/buy (touched zero or fell into the negative), Bitcoin performed well in the months afterward.
Prior to BTC rallying from $1,000 to $20,000, the indicator fell into the negative. And marking the bottom of the 2015 bear market was also a period of accumulation.
“Looking at the history of Bitcoin since 2015, we can see that whenever it touches zero or going negative, the downside Risk decreases, meaning the accumulation phase,” Ki Young Ju explained.
As reported by Bitcoinist previously, on-chain analyst Philip Swift noted that the Dynamic Range NVT Signal entered a bullish phase in May. The indicator has been dubbed a “price to earnings ratio for Bitcoin.”
“Dynamic Range NVTS has been closing up above the lower green band. This is high time frame bullish. Previous NVT Signal lost its efficacy over time. This version with dynamic bands is much more useful as an oversold/overbought tool for strategic investing,” Swift wrote.
Weeks later, the same analyst noted that the percentage of all Bitcoin in circulation that hasn’t moved in a year passed 62%. This is a new all-time high, which by historical standards suggests a bull run is near.