Bitcoin usually sets the pace for other cryptocurrencies to follow. Analysts usually focus on Bitcoin to identify or predict market trends.
The latest analysis from pseudonym analyst Game of Tradeshas revealed six on-chain metrics showing the same levels that occurred during the bottom three bear markets in the past. The analyst Game of Trades says that the on-chain data signals BTC investment as a “generational buying opportunity.”
Analyst Reveal Six Important Metrics For Bitcoin
The pseudonym analyst shared his findings on Twitter, discussing the current accumulation, reserve risk, dormancy floor, and other positive key indicators for Bitcoin.
Accumulation Trend Score
According to Game of Trades, these on-chain metrics show that there has been a significant accumulation among investors. First, the investors accumulating BTC are large entities and have been buying heavily since the crash of FTX.
Comparing this trend to the past, the analyst pointed out that the same happened in 2018 and 2020 when BTC was bottoming out. The analyst said:
Dormancy flow came down to its lowest level EVER seen Indicating that the speculative hands have been washed out And only the strong holders aka HODLers are remaining
Bitcoin Entity-Adjustment Dormancy Flow
This on-chain metric measures the ratio of the present market cap and the annualized dormancy value.
When the dormancy value is higher than the market cap, the analyst considers the market in total capitulation. Historically, this point signals a buying zone, and Glassnode revealed that it fell to the lowest level last year, 2022.
Bitcoin Reserve Risk
This is the third on-chain metrics supporting Game of Trades analysis. The Bitcoin reserve risks measure the confidence level of long-term BTC holders relative to its price. Glassnode data also shows that it fell to the lowest level last year ending indicating high conviction from BTC holders about future price appreciation.
Bitcoin’s Realized Price (RP)
Bitcoin RP is an on-chain metric showing the value of circulating coins at their last price. Simply put, it shows the estimate of what the entire crypto market paid for the BTC supply. But based on Woo Charts, BTC had fallen below the RP level since November 2022, when FTX collapsed until January 13.
According to the analyst, Bitcoin is now above its Realized Price level, suggesting potential for another buying opportunity.
Bitcoin’s MVRV Z-Score
This metric shows when Bitcoin is overvalued or undervalued relative to its realized price or fair value. According to Game of Trades, when the MVRV Z-score moves away from the highly undervalued zone, it indicates a bear market end.
This metric examines mining profitability and how it would affect the market cycles. According to Game of Trades, Bitcoin PM is currently lower, indicating a potential for long-term buying opportunities.
The analyst compared the six metrics above, which marked a bottom in 2015, 2018, and 2022. As mentioned, these metrics are at similar levels. Based on these findings, Game of Trades concludes that investors should expect an unusual risk-reward setup in BTC to the upside.