An analyst points out that although crypto markets have been moving sideways for the past three months, three blockchain data indicators suggest that the bull market might just be beginning. Since late February, the total market value of cryptocurrencies has stayed around $2.5 trillion, leading to divided opinions among market watchers about whether the cycle is over.

What's Going on with Bitcoin?

On May 19, an analyst named ELI5 posted on X, highlighting three on-chain indicators that suggest a new bull market is starting. Historically, bull markets in crypto begin with high Bitcoin dominance, as most investors sell their altcoins during the preceding bear market cycle. For the latest financial and business news, visit COINTURK FINANCE.

When Bitcoin dominance decreases and alt season starts, it signals the next phase of the bull cycle, which is closer to its end. However, this is not currently the case. According to TradingView, Bitcoin’s market dominance is still just above 56% and has been above 50% since October 2023.

The Bitcoin MVRV Z score, which compares the current market value of Bitcoin to its historical average value, usually peaks around 6 during cycle highs. According to blockchain data analysis platform LookIntoBitcoin, the score is currently less than half of that and hasn’t risen above 6 since March 2021.

Key Details

The Puell Multiple, another indicator that aligns with cycle peaks, has yet to show similar signs. This metric is calculated by dividing the daily value of mined Bitcoin by its annual moving average. Coinglass reports that the Puell Multiple dropped below 1 after the halving event on April 20. Peaks above 3 typically align with cycle highs, but it only reached 2.4 during the mid-March 2024 price rise.

Meanwhile, LookIntoBitcoin charts showing how much Bitcoin is held by different groups based on HODL Waves also point to a bullish trend for Bitcoin. The Realized Cap HODL Waves offer a macro perspective on how much Bitcoin recent buyers are holding compared to the past.

The decline in peaks among newer holders suggests that selling pressure has lessened, leaving room for further gains. ELI5 commented on the situation:

“There are fewer newcomers to Bitcoin, and they are more likely to panic sell. It looks like there’s still potential for growth.”

Conclusion

In conclusion, despite the recent sideways movement in crypto markets, several key blockchain indicators point to the beginning of a new bull market. High Bitcoin dominance, a low MVRV Z score, and the Puell Multiple not yet peaking, along with positive trends in HODL Waves, suggest that the market could see further gains. Investors should keep an eye on these indicators for a clearer picture of where the market is headed.