Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

  • Bitcoin price has triggered a 5% upswing overnight, slicing through critical hurdles.
  • Three on-chain metrics suggest that BTC might have bottomed and has kick-started another bear market rally.
  • Growing investor interest combined with massive outflows hints that this could be 2022’s last upswing.

Bitcoin (BTC) price action has spiked 5% over the last 24 hours, hinting at the start of an optimistic scenario. Previous publications have already explored why BTC is ready for a bear market rally from both short-term and long-term outlooks. This article, however, dives deep into three critical on-chain metrics and determines what to expect next from the big crypto.

Also read: FTX Latest: Former CEO Sam Bankman-Fried explains reopening withdrawals of Bahamian arm

Bitcoin price may have bottomed at $15,475

Bitcoin price slipped below $16,000 twice in the last month and formed a base at $15,475. While it may not look like much now but in hindsight, this level is could be an obvious place for BTC to bounce.

For now, the equal lows formed at $15,475 has a high chance of being a local bottom for Bitcoin price, so it can embark on one last bear market rally before 2022 comes to an end. While we have made it sufficiently clear from a technical perspective why BTC could rally soon, let’s take a look at three on-chain metrics that suggest the same.

The 24-hour active addresses metric fell below one million on June 15, which was soon followed by a massive Bitcoin price crash to $17,5953. Although there were multiple attempts to head back above the one million mark between June 15 and November 4, none were successful.

However, this outlook seems to be changing as the 30-day average of active addresses has grown from 922,000 to 965,000 over the last five months. This 4.5% uptick was gradual, indicating that the optimism among holders is coming back. 

BTC active addresses

BTC active addresses

Looking at the 30-day Market Value to Realized Value (MVRV) indicator explains why there is a steady increase in optimism among BTC holders. This on-chain metric is currently hovering around -6.2%. This number indicates the average loss of all the investors that purchased BTC over the last month, which has spiked from a whopping -18.2% to -6.2% in just three weeks. 

This growth reveals that investors are confident in the Bitcoin price performance to come, which is complemented by the slow but steady growth in active addresses.

BTC 30-day MVRV 

BTC 30-day MVRV 

Lastly, the most significant on-chain metric is the exchange flow balance. This indicator determines the flow of BTC into and out of exchanges. If an asset heads into the centralized platforms, it could indicate that investors are looking to sell or increase their collateral.

On the other hand, if the exchange flow balance indicator produces a massive yet negative spike after a steep correction, it indicates that smart money or investors have bought the dip. 

Fortunately for the big crypto, there was a 46,710 BTC outflow on November 23 from exchanges. The last two times this on-chain metric showed a greater than 40,000 BTC outflow were on June 18 and October 27, after which, Bitcoin price rallied 33% and 3%, respectively.

The June 18 scenario is similar to the current outlook since the outflows happened after a massive crash. Therefore, if history were to repeat itself, Bitcoin price is perfectly positioned to trigger another massive run-up.

BTC exchange flow balance

BTC exchange flow balance

To conclude, investors should be paying attention to the $17,593 hurdle. If bulls can overcome this blockade, Bitcoin price can teleport to $19,235, which is the highest volume traded in 2022, making it a formidable resistance level.

To know more about high timeframe take profit levels, read this: Assessing chances of one last bear market rally for 2022

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