Recent analysis of key on-chain metrics suggests a potential turning point for Bitcoin, signaling a positive outlook from a long-term perspective. Several support levels have been reached, indicating increased investor activity and possible price recovery.
The 7-day Simple Moving Average (SMA) of the Fund Flow Ratio has touched the 0.05 level, historically recognized as a major support line. This level often marks the point where the ratio stops declining and begins to recover. The slight rebound observed suggests that investors are starting to trade on exchanges again, a trend typically associated with the end of bear markets or halving events. As this ratio recovers, it has historically preceded the beginning of a bull market, potentially leading to significant long-term price increases for Bitcoin.
Leverage Ratio Shows Signs of Upward Movement
According to CryptoQuant, the 30-day SMA of the Estimated Leverage Ratio has formed a key support range between 0.15 and 0.175 and is showing early signs of recovery. The growing influence of this metric is attributed to the approval of futures ETFs post-2021 and recent positive developments in Bitcoin options trading. The upward movement in the leverage ratio suggests increased confidence among traders, which could contribute to sustained bullish momentum.
The 30-day Exponential Moving Average (EMA) of Binary Coin Days Destroyed (CDD) is currently moving within a range of 0.1 to 0.3, indicating accumulation by long-term holders. When Binary CDD values rise significantly, it often signals the end of a bull market. However, the current range suggests that long-term holders are actively accumulating Bitcoin, which is viewed as a positive sign for future price stability and growth.
The alignment of these on-chain metrics at critical support levels points towards a positive long-term outlook for Bitcoin. The recent movements in these metrics suggest that the market may be transitioning out of a bearish phase, with increased investor activity and accumulation by long-term holders laying the groundwork for potential future price growth.
