The bull market in the crypto industry may just be getting started, as indicated by at least five on-chain indicators, according to an analyst. Despite the crypto markets consolidating sideways for the past three months with a total market capitalization of around $2.5 trillion, these indicators suggest that the cycle is not yet over.
Firstly, Bitcoin’s market dominance is above 56%, which historically indicates the beginning of a bull market. When Bitcoin dominance drops and altseason begins, it signals the next stage of the bull cycle. However, Bitcoin’s dominance is still high, indicating that the bull market is not nearing its end.
Secondly, the Bitcoin MVRV Z score, which compares the asset’s current market value to its historical average value, is currently under 6. This score usually tops at around 6 during cycle peaks, but it has not been above 6 since March 2021.
The Puell Multiple, another metric that aligns with cycle peaks, has not reached over 3. This indicator is calculated by dividing the daily value of Bitcoin mined by the yearly moving average of that value. Peaks of over 3 usually coincide with cycle tops, but it only reached 2.4 during the recent price pump in mid-March.
HODL Waves, which show how much BTC is held by different cohorts, also look bullish for Bitcoin. A falloff in peaks in younger bands suggests that selling pressure has been exhausted, indicating potential room for more gains.
Lastly, the miner revenue per hash metric shows how much money miners make for their proof-of-work. The past two spikes to $0.3 per terahash per second came during previous market cycle peaks.
However, there are also a couple of on-chain metrics suggesting that markets could be overheated and reaching the top. The RHODL ratio compares the average price of recently bought coins to the average price of coins bought 1-2 years ago. If new buyers are paying much more for BTC than longer-term holders, it could signal a market peak. The Cumulative Value-Days Destroyed (CVDD) metric, which tracks the movement of coins from old hands to new hands, also appears to have peaked.
At the time of writing, BTC was trading at $66,668, down 10% from its mid-March all-time high.