Bitcoin on-chain and technical data is starting to suggest that the lowest price for BTC is in

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Bitcoin (BTC) price has followed a four-year cycle with consecutive bullish and bearish trends occurring at somewhat measurable intervals. A closer look at Bitcoin’s long-term price action reveals that the rise and fall of previous cycles look remarkably similar. What is more interesting is that the cycle from 2020 to 2021 shows signs of following the same pattern.

Independent market analyst, HornHarris, found that the period between low-up and high-down is the same since 2015, 152 weeks and 52 weeks, respectively.

Even in 2013, the bear market lasted 58 weeks, only six weeks difference from the other two cycles

Bitcoin price chart with past cycles timeline. Source: Twitter

Another resemblance to the latest bottom formation is the similarity between the current Bitcoin uptrend and that of 2019, when the main catalyst was widespread negative investor sentiment. Bitcoin price has gained almost 350% from the low of $3,125 and it has not fallen below this level going forward, marking the bottom of previous cycles.

Four years later, conditions have changed, but the underlying reason for Bitcoin’s last 30% price surge was still that the market was expecting prices to fall due to macroeconomic headwinds. The lack of positive sentiment and the accumulation of short positions in the futures market may have allowed buyers to stage a rally of disbelief to chase short-term sell-offs and incite FOMO among investors who had stayed. apart.

But not all conditions are the same. Previously, BTC whales, addresses holding more than 1,000 BTC, went on a buying spree as Bitcoin price started to bottom. However, these buyers did not participate in the recent rally, raising concerns about its sustainability.

If history repeats itself, the November 2022 Bitcoin lows of around $15,500 will mark the bottom of the current cycle. It would also mean that a new bullish cycle has started, and the asset could register a new peak in October 2025.

Number of addresses with more than 1,000 BTC. Source: Glassnode

It will be interesting to see if whale buyers buy into the theory of the Federal Reserve under Jerome Powell pulling off a soft landing instead of a recession due to their flight from inflation. December economic data on consumer price inflation and employment figures showed the first signs of macroeconomic improvement. A few other on-chain indicators could help confirm if this bull run is the real deal.

Signs of a short-term bullish reversal appear

Bitcoin has been trading around favorable buy levels for some time over longer timeframes. In the near term, however, the risk of price dips to fresh lows was high due to selling pressure from miners, macro headwinds, and fear of FTX contagion. The recent rally is showing signs of chain signals moving into bullish territory.

Bitcoin’s realized price metric reflects the average price of buyers as coins move across the chain. Its price has only fallen below its realized price three times in the past eight years. Moreover, a break above this level marked the end of the downtrend of each of them.

Currently, the realized price of Bitcoin stands at $19,715. If the price holds above this level, it will encourage buyers sitting on the sidelines to join the rally.

On-chain bitcoin realized price (yellow) and market price (black). Source: Glassnode

The indicator is used to identify bullish and bearish trends. When the price is in an uptrend, investors add to their winning positions on the pullbacks, indicated when the value of the SOPR indicators remains above one. The reverse occurs in a bear; bears dominate the market by selling in rallies. Thus, a crossover of the metric above the pivot at one is a strong trend reversal signal.

So far, the 7-day average trades are still occurring at a loss, but the price is very close to a bullish reversal. Based on the latest retest of the SOPR pivot, the bullish reversal will occur after a successful weekly close above $21,200.

Another reliable short-term on-chain indicator is the expense-to-earnings ratio (SOPR). It measures the profitability of Bitcoin transactions based on the price of tokens when added to and withdrawn from specific addresses.

SOPR adjusted input. Source: Glassnode

Another notable development occurred with Bitcoin miners, who were one of the biggest sellers in 2022 as the market price fell below the cost of producing Bitcoin, putting pressure on them. However, the days of miner surrender are likely behind.

The Hash Ribbon indicator developed by on-chain analyst Charles Edwards has sent a buy signal, suggesting the end of the downward trend in hashrates, with prices recovering above the costs of producing large and medium businesses.

Unless the Bitcoin price falls below $20,000 in the near future, the market can expect miners to start hoarding Bitcoin instead of having to sell the entire amount to cover the price points. operating costs.

The stark similarities between Bitcoin’s previous cycles and a relief from ongoing miner selling should help buyers establish a level of long-term bullish support.

However, the lack of Whale buying and the reversal in price from the SOPR pivot level around $21,200 raises some alarms that sellers may begin to dominate again. The on-chain support level for the buyers is around the realized price at $19,715.

The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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