21 April, 2024

Messari’s On-Chain Data Indicates Bottom For Bitcoin, Hints at Potential Rally

29 Sep, 2023

01 Dec, 2023

  • Multiple on-chain indicators from Messari suggested a bottom for Bitcoin (BTC). 
  • The indicators included Reserve Risk, Market Value to Realized Value, and HODL Wave.
  • A bottom for Bitcoin could potentially trigger a rally for the flagship cryptocurrency. 

On-chain analytics platform Messari recently published multiple on-chain indicators which signaled a Bitcoin bottom. A bottom for BTC could translate into a rally for the flagship cryptocurrency, which has been hovering around the $26,000 level for several weeks. 

Messari recently took to X (formerly Twitter) to share their on-chain metrics for BTC:

According to Messari, the on-chain indicators include Reserve Risk, Market Value to Realized Value, and HODL Wave. The Reserve Risk indicator measures the confidence among long-term crypto holders relative to the price of Bitcoin. A low Reserve Risk indicates high confidence among crypto holders amid low BTC market price

Messari stated that the latest on-chain data showed that the Reserve Risk was in proximity to critical historical levels, which previously aligned with market bottoms for BTC. Market Value to Realized Value compares the current market capitalization of Bitcoin when it last moved for all BTC in circulation. This helps in understanding the cumulative degree of profitability for holders. 

Bitcoin MVRV is used to identify periods where BTC is significantly overvalued or undervalued relative to its fair value at the time. The MVRV ratio recorded by Messari indicated that the market’s valuation of BTC was considerably lower than the realized value. The Bitcoin MVRV was hovering around levels that previously signaled buying opportunities. 

HODL Wave, the third on-chain indicator cited by Messari, categorizes Bitcoin unspent transaction outputs by when they last moved on-chain. Messari noted that BTC which was dormant for at least one year had reached an all-time high. As per Messari, the trend suggested that a large portion of BTC supply was held by long-term holders, which showed conviction among crypto investors regarding Bitcoin’s price. 

Data from CoinMarketCap showed that BTC was trading at $26,960 at the time of writing. The flagship cryptocurrency had a market capitalization of $525 billion and a daily trading volume of nearly $14 billion. 



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