Category: NEWS
-
Bitcoin on-chain metrics are now bullish: Bitfinex
- Bitfinex market report points to bullish metrics for BTC
- Supply in Profit, Bitcoin Realised HODL (RHODL) Multiple and Reserve Risk ratio are all flashing green.
- Bitcoin has traded to above $23k again after slipping on Monday following broader market reaction to economic news.
Bitcoin is trading around $23,360 at the time of writing, about 2.4% up in the past 24 hours as cryptocurrencies flash green on Tuesday amid an improving market sentiment.
For the world’s leading cryptocurrency by market cap, it appears on-chain metrics are ticking further north to suggest a strengthening bullish case.
Supply in Profit up 20%, points to buy signal
According to analysts at Bitfinex, one of Bitcoin’s on-chain metrics suggesting fresh upside momentum is likely the Supply in Profit indicator. Data shows bulls look to have successfully absorbed selling pressure as short-term and some long-term HODLers turn profitable.
An observation of the metric on the 90-day time frame highlights a 20% jump for the “supply in profit” chart in January 2023, the analysts wrote in the report released on Monday.
“This implies that larger and longer-term investors currently hold profitable on-paper spot positions. This is healthy for the latter half of a bear market as a sustained 30-day uptrend after an extensive downtrend on this indicator has historically provided a good buy signal for the following two years,” the Bitfinex team noted.
As far as markets are concerned, the above scenario doesn’t mean that the crypto market is set for an “up-only” move. However, the outlook does suggest bulls have an upper hand in the spot markets, a scenario that’s historically reflective of “late bear and early bull markets.”
The Bitcoin Realised HODL (RHODL) Multiple, historically also bullish, has also been in an uptrend. According to data, the RHODL Multiple has remained positive over a 90-day window, to also suggest profitability for HODLers.
#Bitcoin balance statistics now favour the HODLers! 🙌
On-chain metrics are flipping bullish as we see profitable selling by both short-term & long-term HODLers.
Dive into the details in our latest Bitfinex Alpha:https://t.co/aBJ2teTpVM pic.twitter.com/lBvlb4o43A— Bitfinex (@bitfinex) February 6, 2023
Key metrics suggest a 10x jump for BTC price
Apart from the 90-day EMA, other technical indicators flipping green include the net adjusted Spent Output Profit Ratio. Per on-chain data, the indicator is currently above one, which suggests that net sales across the Bitcoin market are profitable.
Also, the Realised Profit to Losses (RPLR) ratio is above zero, which also confirms the profitable selling observed in past few weeks. The metric is currently moving towards 0.2, a reading comparable to the RPLR measure when Bitcoin price fell to lows of $3,600 in 2019. After the RPLR hit 0.2, BTC price flipped green and rallied 19x, hitting its all-time high in November 2021.
Bitcoin Realized Profit Loss Ratio chart by GlassnodeWith the metric approaching this ratio when Bitcoin fell to lows of $16,000, the possibility of another 10x rally could see BTC target highs of $160,000 over the next two-three years.
Bitcoin’s reserve risk ratio suggests HODLer conviction is high
Looking at a longer time frame, Bitcoin’s on-chain metrics are also pointing to a bullish outlook. One odf these technical indicators is the Reserve Risk ratio.
According to on-chain analytics platform Glassnode, Bitcoin’s reserve risk ratio has fallen to its all-time low. This puts the metric lower than when markets bottomed in 2019 or 2020, Bitfinex analysts pointed out.
As the ratio is a cyclical oscillator that highlights price vs. HODLer conviction, with incentive to sell factored against opportunity cost, a very low ratio translates to a higher conviction among investors.
A positive outlook for Bitcoin is also seen in the Market Value Realised Value (MVRV) ratio, which has recovered and has often coincided with historically bullish returns.
-
Bitcoin’s Lightning Network capacity surges to all-time
- Lightning Network has reached over 5,490 in Bitcoin payments capacity, an all-time high.
- Transactions in BTC on the layer-2 payments network have increased roughly 63% since January 2022.
- The increased Bitcoin micropayments via Lightning Network comes as BTC price retreats below $23k after a great rally to start 2023.
Lightning Network’s capacity in terms of Bitcoin across payment channels has hit a new all-time high, according to the latest data on usage for this major payment network.
The Block Research shows the critical layer-2 network, which is built on Bitcoin, has seen its capacity grow to over 5,490 BTC. That’s nearly 160 BTC more than what was observed on 4 February 2023, according to details shared by Lightning Network statistics.
#LightningNetwork https://t.co/Q0CaYRhLWD observed:
16,093 nodes
76,322 channels
5,332.583 BTC capacity ($124,790,815)median node capacity: 0.005 BTC ($117.01)
past 24h:
+27 nodes +409 channels +11.933 BTC ($279,240)#Lightning #LN #bitcoin $BTC— Lightning Network statistics ⚡ (@LNstats) February 4, 2023
Lightning Network capacity up 63% since January 2022
The benefits of the Lightning Network technology, mainly around fast and low-cost micropayments, has increasingly attracted more people. According to the data, Lightning Network’s capacity in BTC terms is up approximately 63% since January 2022.
Approximately 3,350 bitcoin was recorded in payment channels on the protocol on 1 January last year. From the figures, it’s clear that total network value has declined compared to when Bitcoin price hit an all-time high in November 2021. The value of current Lightning Network capacity in USD is around $128 million – down from more than $216 million when BTC raced to highs of $69,000.
But as the on-chain metrics for the payment network’s daily usage shows, there has been continuous adoption even as the crypto winter saw crypto prices crash. Bitcoin is currently trading above $22,700 after a brief rally last week ended with bears mounting a wall near $24,000.
According to data from CoinGecko, BTC price remains roughly 67% off the ATH of $69.044 reached on 10 November 2021. In comparison, (as noted above) LN capacity has increased 63% since January 2022.
Find out more about Lightning Network here.
