In its report State of the Network # 109, the analytical firm Coin Metrics evaluates the current cycle of the bitcoin market, through the analysis of several On-Chain indicators. Among the conclusions, the study affirms that the maximum of the current cycle of bitcoin has not yet been reached.
Each market cycle is unique, affirms Coin Metrics, and highlights that historical data can be used to indicate trends, but not to predict price evolution.
For example, the report maintains that each bitcoin halving has marked the beginning of a new cycle.
The 2013 cycle had its maximum 370 days after the first halving, while in 2017 a maximum was recorded 524 days after the second halving. We are currently 415 days after the third halving, which occurred on May 11, 2020.
Coin Metrics.
The following graph shows the growth trajectories of bitcoin’s market capitalization after the first halving (in blue) and, in red, the evolution after the second halving. The growth curve after the third halving is shown in blue.
Price evolution of bitcoin after each halving. Source: Coin Metrics.
The first indicator analyzed by Coin Metrics is the relationship between bitcoin’s market capitalization and its effective capitalization (MVRV). The latter takes into account, for a certain group of BTC, the price they had the last time they were moved . “Using historical data, MVRV has been one of the most reliable on-chain indicators for predicting cycle highs and lows,” says Coin Metrics.
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.
