An analyst indicates that despite the crypto markets consolidating sideways over the past three months, at least three blockchain data indicators suggest the bull market might just be starting. Since the end of February, the total market value of cryptocurrencies has hovered around $2.5 trillion, and market observers are conflicted about whether the cycle has ended.
What’s Happening on the Bitcoin Front?
TLDR analyst ELI5 highlighted in a post on X on May 19 that these three on-chain indicators suggest it is just beginning. Historically, crypto bull markets start with high levels of Bitcoin dominance, and most investors had sold their altcoin assets during the previous bear market cycle.
On the other hand, when Bitcoin dominance falls and alt season begins, it signals the next phase of the bull cycle, bringing it one step closer to the end; however, this does not seem to be the case yet. According to TradingView, Bitcoin’s market dominance is still slightly above 56%. Bitcoin’s market share has been above 50% since October 2023.
The Bitcoin MVRV Z score, which compares the asset’s current market value to its historical average value, typically peaks around 6 during cycle peaks, according to blockchain data analysis platform LookIntoBitcoin charts. According to LookIntoBitcoin, it is currently less than half of that and has not risen above 6 since March 2021.
Notable Details
The Puell Multiple, another data indicator consistent with cycle peaks, has yet to do so. This indicator is calculated by dividing the daily value of mined Bitcoin by its annual moving average. According to Coinglass, the Puell Multiple fell below 1 following the halving process on April 20. Peaks above 3 generally coincide with cyclical peaks and only reached 2.4 during the mid-March 2024 price increase.
Meanwhile, according to LookIntoBitcoin, charts showing how much Bitcoin is held by different groups based on HODL Waves also indicate a bullish trend for Bitcoin. The Realized Cap HODL Waves provide a macro view of how much Bitcoin recently purchased holders are holding compared to some time ago.
The decline in peaks in the younger bands suggests that selling pressure has exhausted and there may be room for further gains. ELI5 shared the following statements on the subject:
“The number of newcomers to Bitcoin is fewer, and they are more likely to panic sell. It seems we can still rise.”
