24/12/2024
Today, weâll analyze Bitcoinâs fundamental and on-chain metrics to understand its growth potential and when a market reversal might occur. Weâll move from the most bearish to the most bullish indicators.
1. M2 Global
⢠What it means: Tracks the global money supply (M2) and its correlation with Bitcoinâs price.
⢠Analysis: Historically, Bitcoin has followed global money supply with a 10-week lag. Over the past two months, global money supply has dropped significantly by $4 trillion.
⢠Conclusion: If the correlation holds, we could see a deeper correction in the Bitcoin market.
2. LTH Inflation Rate
⢠What it means: Measures the relative supply growth of long-term holders.
⢠Analysis: The metric is already near or above previous extremes that historically coincided with market reversals.
⢠Conclusion: This suggests we should remain cautious as the market shows signs of overheating.
3. VDD Multiple
⢠What it means: Evaluates network activity relative to Bitcoinâs market cap to identify market cycles.
⢠Analysis: The metric already reached the extreme zone in this cycle. In previous cycles, this happened some time before the peak and often occurred more than once.
⢠Conclusion: While this signals caution, we might not have reached the final top yet.
4. 1+ Year HODL Wave
⢠What it means: Indicates the percentage of Bitcoin held for over a year, reflecting long-term investor behavior.
⢠Analysis: The chart usually begins to decline during the final wave of a cycleâs growth, which is also happening now. Rounded formations (âsaucersâ) often coincide with market tops.
⢠Conclusion: This warrants close attention, as itâs a strong signal of a peak.
Continued in the comments đđ˝
