On-chain Bitcoin indicators enter bullish zone – Is a recovery about to happen?

Bitcoin (BTC) has continued to decline over the past 24 hours, showing clear signs of weakness in the market.

Nevertheless, many indicators are currently suggesting that a bullish trend may be about to occur, with the potential for Bitcoin to continue its upward momentum in the near future.

Has Bitcoin hit the bottom?

An important indicator supporting the bullish argument is the net selling ratio. This indicator compares the spending level of investors over a certain period of time with the actual market capitalization.

History shows that when this ratio drops to the 0.1% region or lower, it often signals the beginning of a strong bullish phase. Currently, the net selling ratio is at 0.086%, indicating that Bitcoin may soon resume its upward momentum.

Source: GlassnodeAdding to this positive outlook is the adjusted output profit ratio (aSOPR), which recently dropped below 1, reaching 0.99 – indicating that many traders are selling at a loss.

Selling at a loss often drives the market up when Bitcoin is accumulated at a discounted price.

Although these indicators still lean towards a bullish trend and suggest a possible recovery may be imminent, Bitcoin Magazine notes that traders may be waiting for the optimal buying moment.

The Market Value to Realized Value indicator (MVRV) over a 70-day cycle helps identify this ideal opportunity. A major price surge often begins when MVRV rises above the 70-day moving average.

Source: GlassnodeIf this happens, Bitcoin may continue to set new highs, increasing the monthly profit – currently at 4.32% according to data from CoinMarketCap.

Market activity remains low

Market activity remains sluggish, with a decrease in transaction volume, indicating a lack of momentum to push Bitcoin higher.

At the time of writing, the volume of BTC transferred has significantly decreased, currently around 441,000 BTC – a sharp decline compared to previous peak levels.

Source: GlassnodeIf the market momentum continues to weaken, the likelihood of a strong price surge will be very low. For a real growth surge to occur, both trading volume and Bitcoin price must increase simultaneously.

If these two factors diverge, it will signal weak momentum, making the likelihood of a strong recovery difficult.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making any decisions. We are not responsible for your investment decisions.

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