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By The Numbers: Rough Waters Ahead, But Bitcoin is Ready to Excel

Holder confidence and robust capital inflows permeate through the price and derivatives market. Bitcoin turns bullish as macro turns bearish.

Bitcoin Magazine Pro and Ansel Lindner

Jun 5

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Introduction

The bullish fundamentals we have been covering for months are starting to be represented in the price. This week's on-chain metrics show increased long-term holder confidence and robust capital inflows. Price metrics tick all bullish boxes with room to run to the upside. The derivatives market shows increased leverage and sophisticated risk management, suggesting potential for volatility. However, macroeconomic indicators are more bearish, with declining liquidity pointing to a potential deflationary recession. We are entering uncertain economic waters with a whole new kind of average investor. Retail investors remain absent, while institutional and long-term buyers dominate. This mix of bullish trends and economic headwinds sets the stage for a critical period in Bitcoin's market dynamics.

On-chain Metrics Indicate Cycle Continuation

Overall, this week's on-chain metrics indicate increasing long-term holder confidence and robust capital inflows, signaling a bullish outlook for Bitcoin's future price appreciation. They continue to signal a bullish sentiment in the Bitcoin market. All metrics are behaving as we would expect in the middle of a bull market at the end of a long-term consolidation, exactly what we have been forecasting for months.

The one exception to this general bullishness might be the Realized HODL Ratio, which uses a ratio of the Realized Cap HODL Waves between 1 week and 1-2 years. It decreased from last week, showing the realized price for the long-term holders moved up more than for the short-term traders. However, when taken in context of the 30-day move, it is still nicely positive. If we look at the chart below of this metric, you notice that a bottom was set on or about May 15th and the down tick is not significant. It also shows we are nowhere near a cycle top.

Investor Insight

The Realized Price 30-day Change, which is a useful proxy for understanding the rate of capital inflows and outflows by tracking the average cost basis of Bitcoin, has risen strongly to 4.54%, a significant 103.26% increase from 30 days ago and is signaling cyclical price expansion. This is caused by robust capital inflows and growing investor confidence. Historically, this behavior occurs as price is about to make a very significant move...

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