Bitcoin’s recent price action has been nothing short of exhilarating, but beyond the market buzz lies a wealth of on-chain data offering deeper insights. By analyzing metrics that gauge network activity, investor sentiment, and the BTC market cycles, we can gain a clearer picture of Bitcoin’s current position and potential trajectory.

Plenty Of Upside Remaining

The MVRV Z-Score compares Bitcoin’s market cap, or price multiplied by circulating supply, with its realized cap, which is the average price at which all BTC were last transacted. Historically, this metric signals overheated markets when it enters the red zone, while the green zone suggests widespread losses and potential undervaluation.

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Currently, despite Bitcoin’s rise to new all-time highs, the Z-score remains in neutral territory. Previous bull runs saw Z-scores reach highs of 7 to 10, far beyond the current level of around 3. If history repeats, this indicates significant room for further price growth.

Miner Profitability

The Puell Multiple evaluates miner profitability by comparing their daily USD-denominated revenue to their previous one-year moving average. Post-halving, miners’ earnings dropped by 50%, which led to a multi-month period of decreased earnings as the BTC price consolidated for most of 2024.

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Yet even now, as Bitcoin has skyrocketed to new highs, the multiple indicates only a 30% increase in profitability relative to historical averages. This suggests that we are still in the early to middle stages of the bull market, and when comparing the patterns in the data we look like we have the potential for explosive growth akin to 2016 and 2020. With a post-halving reset, consolidation, and a finally a reclaim of the 1.00 multiple level signifying the exponential phase of price action.

Measuring Market Sentiment

The Net Unrealized Profit and Loss (NUPL) metric quantifies the network’s overall profitability, mapping sentiment across phases like optimism, belief, and euphoria. Similar to the MVRV Z-Score as it is derived from realized value or investor cost-basis, it looks at the current estimated profit or losses for all holders.

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Presently, Bitcoin remains in the ‘Belief’ zone, far from ‘Euphoria’ or ‘Greed’. This aligns with other data suggesting there is ample room for price appreciation before reaching market saturation. Especially considering this metric is still at lower levels than this metric reached earlier this year in March when we set out previous all-time high.

Long-Term Holder Trends

The percentage of Bitcoin held for over a year, represented by the 1+ Year HODL Wave, remains exceptionally high at around 64%, which is still higher than at any other point in Bitcoin history prior to this cycle. Prior price peaks in 2017 and 2021 saw these values fall to 40% and 53%, respectively as long-term holders began to realize profits. If something similar were to occur during this cycle, then we still have millions of bitcoin to be transferred to new market participants.

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So far, only around 800,000 BTC has been transferred from the Long Term Holder Supply to newer market participants during this cycle. In past cycles, up to 2–4 million BTC changed hands, highlighting that long-term holders have yet to cash out fully. This indicates a relatively nascent phase of the current bull run.

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Tracking “Smart Money”

The Coin Days Destroyed metric weighs transactions by the holding duration of coins, emphasizing whale activity. We can then multiply that value by the BTC price at that point in time to see the Value Days Destroyed (VDD) Multiple. This gives us a clear insight into whether the largest and smartest BTC holders are beginning to realize profits in their positions.

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Current levels remain far from the red zones typically seen during market tops. This means whales and “smart money” are not yet offloading significant portions of their holdings and are still awaiting higher prices before beginning to realize substantial profits.

Conclusion

Despite the rally, on-chain metrics overwhelmingly suggest that Bitcoin is far from overheated. Long-term holders remain largely steadfast, and indicators like the MVRV Z-score, NUPL, and Puell Multiple all highlight room for growth. That said, some profit-taking and new market participants signal a transition into the mid to late-cycle phase, which could potentially be sustained for most of 2025.

For investors, the key takeaway is to remain data-driven. Emotional decisions fueled by FOMO and euphoria can be costly. Instead, follow the underlying data fueling Bitcoin and use tools like the metrics discussed above to guide your own investing and analysis.

For a more in-depth look into this topic, check out a recent YouTube video here: What’s Happening On-chain: Bitcoin Update

The Bitcoin Pi Cycle Top Indicator has gained legendary status in the Bitcoin community for its uncanny accuracy in identifying market cycle peaks. Historically, it has timed every single Bitcoin cycle high with remarkable precision—often within just three days. Could it work its magic again this cycle? Let’s dive deeper into how it works and its significance in navigating Bitcoin’s market cycles.

What is the Pi Cycle Top Indicator?

The Pi Cycle Top Indicator is a tool designed to identify Bitcoin’s market cycle tops. Created by Philip Swift, Managing Director of Bitcoin Magazine Pro in April 2019, this indicator uses a combination of two moving averages to forecast cycle highs:

1. 111-Day Moving Average (111DMA): Represents the shorter-term price trend.
2. 350-Day Moving Average x 2 (350DMA x 2): A multiple of the 350DMA, which captures longer-term trends.

When the 111DMA rises sharply and crosses above the 350DMA x 2, it historically coincides with Bitcoin’s market cycle peak.

The Mathematics Behind the Name

Interestingly, the ratio of 350 to 111 equals approximately 3.153—remarkably close to Pi (3.142). This mathematical quirk gives the indicator its name and highlights the cyclical nature of Bitcoin’s price action over time.

Why Has It Been So Accurate?

The Pi Cycle Top Indicator has been effective in predicting the peaks of Bitcoin’s three most recent market cycles. Its ability to pinpoint the absolute tops reflects Bitcoin’s historically predictable cycles during its adoption growth phase. The indicator essentially captures the point where the market becomes overheated, as reflected by the steep rise of the 111DMA surpassing the 350DMA x 2.

How Can Investors Use This Indicator?

For investors, the Pi Cycle Top Indicator serves as a warning sign that the market may be approaching unsustainable levels. Historically, when the indicator flashes, it has been advantageous to sell Bitcoin near the top of the market cycle. This makes it a valuable tool for those seeking to maximize gains and minimize losses.

However, as Bitcoin matures and integrates further into the global financial system—bolstered by developments like Bitcoin ETFs and institutional adoption—the effectiveness of this indicator may diminish. It remains most relevant during Bitcoin’s early adoption phase.

A Glimpse Into the Future

The big question now is: will the Pi Cycle Top Indicator remain accurate in this cycle? With Bitcoin entering a new era of adoption and market dynamics, its cyclical patterns may evolve. Yet, this tool has proven its worth repeatedly over Bitcoin’s first 15 years, offering investors a reliable gauge of market tops.

Final Thoughts

The Pi Cycle Top Indicator is a testament to Bitcoin’s cyclical nature and the power of mathematical models in understanding its price behavior. While its past accuracy has been unparalleled, only time will tell if it can once again predict Bitcoin’s next market cycle peak. For now, it remains an indispensable tool for those navigating the thrilling highs and lows of Bitcoin.

Explore the full chart and stay informed.

As Bitcoin once again finds itself in price discovery mode, market watchers and enthusiasts are curious: has retail FOMO set in yet, or is the retail surge we’ve seen in past bull cycles still on the horizon? Using data from active addresses, historical cycles, and various market indicators, we’ll examine where the Bitcoin market currently stands and what it might signal about the near future.

Rising Interest

One of the most direct signs of retail interest is the number of new Bitcoin addresses created. Historically, sharp increases in new addresses have often marked the beginning of a bull run as new retail investors flood into the market. In recent months, however, the growth in new addresses hasn’t been as sharp as one might expect. Last year, we saw around 791,000 new addresses created in a single day—a sign of considerable retail interest. In comparison, we now hover significantly lower, although we have recently seen a modest uptick in new addresses.

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Google Trends also reflects this tempered interest. Although searches for “Bitcoin” have been increasing in the past month, they remain far below previous peaks in 2021 and 2017. It seems that retail investors are showing a renewed curiosity but not yet the fervent excitement typical of FOMO-driven markets.

Supply Shift

We are witnessing a slight transition of Bitcoin from long-term holders to newer, shorter-term holders. This shift in supply can hint at the potential start of a new market phase, where experienced holders begin taking profits and selling to newer market participants. However, the overall number of coins transferred remains relatively low, indicating that long-term holders aren’t yet parting with their Bitcoin in significant volumes.

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Historically, during the last bull run in 2020-2021, we saw large outflows from long-term holders to newer investors, which fueled a subsequent price rally. Currently, the shift is only minor, and long-term holders seem largely unfazed by current price levels, opting to hold onto their Bitcoin despite market gains. This reluctance to sell suggests that holders are confident in further upside potential.

A Spot-Driven Rally

A key aspect of Bitcoin’s latest rally is its spot-driven nature, in contrast to previous bull runs heavily fueled by leveraged positions. Open interest in Bitcoin derivatives has seen only minor increases, which stands in sharp contrast to prior peaks. For instance, open interest was significant before the FTX crash in 2022. A spot-driven market, without excessive leverage, tends to be more stable and resilient, as fewer investors are at risk of forced liquidation.

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Big Holders Accumulating

Interestingly, while retail addresses haven’t increased substantially, “whale” addresses holding at least 100 BTC have been rising. Over the past few weeks, wallets with large BTC holdings have added tens of thousands of coins, amounting to billions of dollars in value. This increase signals confidence among Bitcoin’s largest investors that the current price levels have more room to grow, even as Bitcoin reaches all-time highs.

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In past bull cycles, we saw whales exit or decrease their positions near market peaks, a behavior we’re not seeing this time. This trend of accumulation by experienced holders is a strong bullish indicator, as it suggests faith in the market’s long-term potential.

Conclusion

While Bitcoin’s rally to all-time highs has brought renewed attention, we’re not yet seeing the telltale signs of widespread retail FOMO. The subdued retail interest suggests we may be only in the beginning phase of this rally. Long-term holders remain confident, whales are accumulating, and leverage remains modest, all indicators of a healthy, sustainable rally.

As we continue into this bull cycle, the market’s structure suggests that the potential for a larger retail-driven surge remains ahead. If this retail interest materializes, it could propel Bitcoin to new heights.

For a more in-depth look into this topic, check out a recent YouTube video here: Has Retail Bitcoin FOMO Begun?