Bitcoin on-chain metrics show compelling signs of accumulation and continuation of BTC price rally

Bitcoin price sustained above the $23,000 level despite macroeconomic headwinds and profit-taking by traders.
BTC price held steady above the $23,000 level by breaking above the cost basis of its three key holder cohorts.
From the on-chain perspective, Bitcoin's capitulation has unfolded, and bulls helped the asset hold above the key psychological level, fueling a bullish narrative.

Ekta Mourya FXStreet

Bitcoin price recovered after the announcement of US Nonfarm Payrolls data. The asset sustained above the key psychological level of $23,000. On-chain metrics point to a continuation of the Bitcoin price rally in the long term.

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Bitcoin price sustains above $23,000 despite macroeconomic headwinds

Bitcoin price crumbled under pressure following the announcement of US Nonfarm Payrolls. The number of jobs added by the world’s largest economy came in 2.5 times higher than expectations, making traders wary of the US Central Bank’s next rate hike to curb inflation.

Bitcoin price wiped out gains from the beginning of February after hitting $24,000 briefly. While Bitcoin struggles to return to $24,000, bulls have defended the $23,000 level.

Bitcoin on-chain metrics support the bullish narrative

Bitcoin’s realized price, Short-term holder realized price, and Long-term holder realized price are the on-chain metrics that give a clear understanding of whether various cohorts of the market are profitable or underwater.

Experts at Bitcoin Pro consider it key since when Bitcoin breaks above the cost basis of all three cohorts, it has a collective psychological effect when most market participants are no longer underwater.

Bitcoin: Long/Short-term on-chain cost basis

With BTC above $23,000, market participants in all three segments are no longer underwater. This highlights the importance of this level for market participants.

Bitcoin Market Value to Realized Value (MVRV) is an on-chain indicator that can determine when the price is above or below "fair value" and assess market profitability. Currently, MVRV Ratio is 1.18, reasonably close to 1.

When MVRV Ratio is below 1, it historically signals bear market bottoms and smart money accumulation. Since MVRV is at 1.18, it fuels the narrative of accumulation by market participants.

Bitcoin MVRV ratio

From an on-chain perspective, capitulation, a mass sell-off of BTC, has unfolded. Bitcoin holders defended the $23,000 level, and there are signs of a sustained uptrend in BTC, despite macro headwinds.

Author

Ekta Mourya

FXStreet

Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.

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