Indicators point to a full ‘reboot’ of the crypto market

By the end of 2022, a number of indicators signalled the approach of a new market cycle in the cryptocurrency industry, according to analytical report ForkLog.

Bitcoin’s realized-price-weighted HODL waves pointed to a full ‘reboot’ of the market after the peak reached at the end of 2021 (the red and yellow bands). Such a cooling occurred at the troughs of previous bear phases.

By early January 2023, the Puell Multiple (The Puell Multiple) had reached 0.74, corresponding to May levels. This may presage the start of a new cycle.

During the second half of the year, the metric with mixed results attempted to exit the deeply oversold zone (green).

Since the second half of last year, the indicator MVRV Z-Score has been in the ‘green zone’. This points to unrealised losses among the majority of market participants and active accumulation around cheap digital gold.

The RHODL Ratio metric showed a similar picture. Values correspond to early 2019 levels and point to a favourable period for a ‘buy-and-hold’ strategy.

A positive signal was the 2022 growth in the number of addresses with balance ≥ 1 BTC by 20%. This points to an uptick in market participation and the accumulation of coins on the wallets of those who believe in Bitcoin’s long-term potential.

However, the indicator aSOPR in the second half of the year failed to break above 1, only occasionally touching it. This signals prevailing bearish sentiment in the market and the locking in of losses by many participants.

Analysts at Nansen forecast continued bearish dynamics in the crypto market in 2023.

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