A well-known on-chain analyst named Philip Swift has found many things like this. Swift is the owner of the data site LookIntoBitcoin, which keeps an eye on many of the most popular Bitcoin market indicators. Check out immediate-edge.live, the greatest trading bot on the market that is utilised by millions of investors.
Swift told Cointelegraph in a recent interview what experts are learning from the data and what traders should pay attention to.
How long will the average Bitcoin owner have to wait until the market turns and the cryptocurrency recovers from its two-year lows?
You told us that some on-chain measures, such as HODL Waves and RHODL Ratio, seem to show that BTC may have hit bottom. Most of the time, this happens during a bear market because long-term investors don’t want to sell until the price increases. We can tell that this will happen.
This reduces the number of goods on the market, which could cause prices to go up when demand rises again.
How is this bear market different from other times when the price of Bitcoin went up and down? Can anything good come from this?
Now that all the tourists have left, the only people left in the crypto sector are those who are serious and passionate about crypto. This group stands to gain the most from the next bull run as long as they don’t lose their minds trading with leverage.
First, the market cycle has been going on for a while, so it’s likely that most of the bad things that can happen during a bear market have already happened. Since the halving, the chart below shows how Bitcoin has done in each cycle. We are getting close to the points where the last two cycles ended.
People’s lack of trust in governments and their currencies will lead to a rush toward private “hard” assets in 2023, which will be great for Bitcoin.
What other important on-chain measurements to keep an eye on to find the bottom of the market?
Watch out for people on Twitter who show Bitcoin on-chain charts that have been cut in strange or very strange ways. Most of the time, this kind of data doesn’t add much to the story that the most critical indicators tell, and the only reason people share it is to get attention, not to help others.
Taking into account the current state of the market, there are two very important things to remember:
The MVRV Z-Score is an important measurement that many Bitcoin users use. It shows how much Bitcoin’s price can go up or down from its real value. The “average cost basis” for each Bitcoin that has been bought is the price that has been “realized.” This is a rough estimate of the level of the market where it would be profitable. Except in the worst cases of a bear market, the price will never go below that level.
If it does, the green “accumulation” zone on this chart will be reached by the indicator. We’re in that range right now, so a long-term investor with a good plan might want to buy more Bitcoin at these prices.
Do you want to say anything else?
Don’t sell your digital currencies when the market is falling. Just have patience and use excellent tools to help you better deal with your feelings.
How long do you think Bitcoin will keep going in the same direction as risky assets, and what do you think will cause it to break?
Bitcoin was a good way for markets to figure out how risky the future would be for most of 2022. People on the market will realize in 2023 that most of the risk comes from governments and not from assets usually thought of as “risky.” This is the change that will happen.