On-chain metrics — MVRV, SOPR, and realised losses — show a strong correlation with the formation of local lows in a bull market. This was demonstrated by Glassnode.
According to analysts, a group of short-term investors is the dominant group realising losses. They decided to support this empirical observation by identifying periods of seller exhaustion to determine inflection points during corrections and consolidations within an upward trend.
Reversal areas tend to transition from smaller timeframes (minutes to hours) to larger ones (days to months), the experts noted.
To identify this effect, they utilised age breakdown metrics, distinguishing two different sets of investors from the broader category of speculators (holding coins for less than 144 days).
The experts identified:
- day traders (transactions within 24 hours);
- swing traders (day to month).
According to analysts, the first group reacts almost instantly to any price fluctuations, generating a large number of seller exhaustion signals. Many of these are “noisy” due to the unstable nature of the chosen timeframe, they added.
Swing traders experience a significantly lower frequency of fluctuations within the signal, as the higher time range smooths the average cost. This group is less sensitive to price changes but is also prone to volatility, as quotes often fluctuate around their purchase level during the holding period.
Experts have pledged to continue working on improving on-chain metrics to identify behavioural patterns reflected in seller exhaustion.
Earlier, analysts at Standard Chartered stated that Bitcoin had reached a bottom within the correction, confirming a target of $150,000 by the end of the year and $200,000 by the end of 2025.
Former BitMEX CEO Arthur Hayes suggested that digital gold prices could surpass $60,000 and move towards $70,000 by the end of August.
Previously, QCP Capital predicted that the price of the first cryptocurrency would rise to $74,000 due to ETF purchases by hedge funds and favourable inflation data in the US.