Bitcoin (BTC) might be just one crucial on-chain signal away from the onset of a traditional bull market, as per analyst David Puell.
In a tweet dated Dec. 17, the creator of Puell Multiple argued that the stage is nearly set for the conclusion of the BTC price bear market.
Puell: Bitcoin Network Activity Falls Short
Despite predictions of new lows for BTC/USD possibly hitting $12,000 or lower in this cycle, not everyone is entirely pessimistic about Bitcoin’s future.
Puell believes that two essential on-chain trends required for a BTC price recovery are already visible.
Long-term holders (LTHs) are holding on to their Bitcoin despite a drop of over 70% from its previous all-time high.
Meanwhile, short-term “speculators” are feeling the sting of recent price movements. These “tourists,” as Cointelegraph reported, may have mostly left the market already.
According to Puell, what’s lacking is an increase in network activity from all Bitcoin participants.
He stated, “On-chain, three factors are needed for a bull: 1. Holding behavior from long-term investors. 2. Painful losses from short-term speculators. 3. Network activity across the board.”
He further mentioned, “Personally seeing 1 and 2. 3 is still underwhelming.”
He also noted that “favorable” macro conditions and increased resilience of crypto to market shocks would support the market turnaround.
BTC/USD was trading around $16,700 at the time of writing, according to data from Cointelegraph Markets Pro and TradingView.
Is Bitcoin Halving Cycle Following the Norm?
This perspective aligns with those urging calm in light of BTC’s current price performance.
Among them is the popular analytics account Dilution-proof, which highlighted BTC/USD mimicking past bear market behavior.
This assertion was supported by Bitcoin’s MVRV-z score – a measure of market cap to realized cap in standard deviations. Initially termed “Market-Value-to-Realized-Value Temperature (MVRVT),” the metric shows signs of a typical bear market bottom formation, indicating that Bitcoin “is just following its historical cycle post-halving date.”
Cointelegraph had earlier pointed out remarkable similarities between 2022 and previous price cycles using MVRV-z.
The views, thoughts, and opinions expressed here are solely those of the authors and do not necessarily represent the views and opinions of Cointelegraph.
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