Against a flat price action at relatively low levels, the number of active Bitcoin addresses in June fell by 9.38%. Yet some on-chain indicators offer positive signals.
The graph below shows the intensification of the correlation between the active-address count and Bitcoin price amid a market correction.
The decline in on-chain activity also manifested in a drop in on-chain transactions to early-2016 levels.
Despite the correction and the evident decline in on-chain activity, the trajectory of coins held by long-term investors continues to show a pattern of accumulation.
Analyst Michaël van de Poppe notes that a similar situation occurred during deep declines in previous market cycles.
The values of the MVRV Z-Score indicator are approaching the level of 1, at which Bitcoin is neither overvalued nor undervalued by the market.
The overbought zone, according to the MVRV Z-Score, was reached already at the end of February this year. However, a buyers’ zone of deep oversold, as in March 2020, remains well out of reach.
Based on the NVT Price indicator, Bitcoin’s fundamentally justified price sits slightly above $50,000. Therefore, the leading cryptocurrency is currently undervalued by the market.
The aSOPR indicator values since mid-May have remained below 1. This points to prevailing panic among investors, multiple loss realizations and Bitcoin being oversold.
A similar situation in the context of aSOPR occurred in March 2020, when the price was at a local bottom well below $10,000.
Earlier ForkLog reported a drop in activity on Bitcoin and Ethereum networks to yearly lows.
Subscribe to ForkLog’s channel on YouTube!