After dropping below $60,000, a rigorous examination of on-chain indicators offers fresh insights that point to a possible robust comeback for Bitcoin in the near future. A composite indicator of the health of the Bitcoin network, the “Bitcoin Fundamental Index” produced by Swissblock, just reached what seems to be an inflection point, suggesting that the price of Bitcoin may rise.
The Short-Term Holder MVRV (Market Value to Realised Value), which is now 0.96, is one of the important measures to take into account. In essence, this ratio contrasts the realised value—the average price at which coins were last moved—with the market value, or the price at which Bitcoin is now trading. If other factors are in place, a value below one usually means that short-term investors are holding coins at a loss, which may indicate a possible bottom.
A market rebound has usually been signalled when the STH-MVRV dips below one, indicating that sellers may be weary and that the selling pressure from short-term holders is lessening. The current performance of the Bitcoin Fundamental Index, which indicates a recovery from lower levels and suggests improved network expansion and investor confidence, lends further credence to this notion.
The “Bitcoin Fundamental Index” figure shows that there have been notable spikes in the index that are strongly correlated with price gains for Bitcoin. The index itself tracks a number of network health metrics, including as transaction volume, wallet activity, and other confidential proprietary metrics that are intended to assess the general mood and underlying stability of Bitcoin.
The index number as of right now is getting close to the upper end of its recent range. Such patterns have historically signalled the accumulation of strong bullish emotion, particularly when paired with a low STH-MVRV.
