Bitcoin Set for Major Bull Run? These 3 On-Chain Metrics Signal A Turning Point

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Recent data from CryptoQuant has revealed that Bitcoin may be on the cusp of a significant recovery, supported by key on-chain metrics.

Particularly, according to a CryptoQuant analyst under the pseudonym Darkfost, several indicators are reaching crucial support levels, signaling a “potential long-term bullish shift.” These metrics suggest that Bitcoin’s price could experience substantial growth as market sentiment turns more optimistic.

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Key On-Chain Metrics Pointing To Recovery

One of the primary indicators the analyst highlights is the 7-day Simple Moving Average (SMA) of the Fund Flow Ratio. Currently at 0.05, this metric has historically acted as a major support line. When it reaches this level, it often marks the end of a bear market or signals the beginning of a new bullish phase.

Bitcoin fund flow ratio. | Source: CryptoQuantThe fact that the Fund Flow Ratio is now showing a slight rebound, according to data revealed by Darkfost suggests that investors are becoming more active on exchanges, a positive sign for Bitcoin’s future price trajectory.

In addition to the Fund Flow Ratio, the 30-day SMA of the Estimated Leverage Ratio is another key metric showing signs of recovery. The leverage ratio, which has formed a support range between 0.15 and 0.175, is trending upwards.

Bitcoin estimated leverage ratio. | Source: CryptoQuantThis indicator measures the use of leverage in Bitcoin trading, and a rise often indicates increased market confidence. Darkfost highlighted that the approval of futures exchange-traded funds (ETFs) and recent developments in Bitcoin options trading would contribute to the “growing influence” of this metric.

Another critical metric Darkfost outlined is the 30-day Exponential Moving Average (EMA) of Binary Coin Days Destroyed (CDD). This indicator tracks the movement of long-term Bitcoin holders, and when it rises sharply, it usually signals the “end of a bull market,” according to the CryptoQuant analyst.

Bitcoin Binary CDD. | Source: CryptoQuantThis metric fluctuates between 0.1 and 0.3, indicating that long-term holders are accumulating Bitcoin. Notably, this trend suggests that seasoned investors are positioning themselves for potential future gains, which could further boost Bitcoin’s price in the coming months.

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Bitcoin Positive Long-Term Outlook

The analysis concludes with a focus on the long-term outlook for Bitcoin. The CryptoQuant analyst believes that the recent movements in on-chain metrics are a positive signal for Bitcoin’s long-term growth. His conclusion read:

I prefer to observe on-chain data from a long-term perspective. These support levels and recent movements are very positive from a long-term standpoint.

As revealed in the report, the support levels identified in the Fund Flow Ratio, Leverage Ratio, and Binary CDD all point towards the conclusion of the bear market, with increasing momentum building for a future bull run. However, the timing and magnitude of the potential price increases remain uncertain.

BTC price is moving upwards on the 2-hour chart. Source: BTC/USDT on TradingView.comFeatured image created with DALL-E, Chart from TradingView