Bitcoin’s (BTC) price is currently on an upward momentum, and there is a chance the crypto asset could surge higher, according to on-chain data.
A report from the pseudonymous CryptoQuant analyst Avocado revealed that several on-chain support levels suggest a positive turning point for BTC in the long term, indicating that the cryptocurrency is still in its bull season.
Positive Outlook for Bitcoin
Avocado said these on-chain data points have reached their average support levels, and coupled with recent price movements, these metrics signal positive sentiment from a long-term standpoint.
One of the metrics is the seven-day Simple Moving Average (SMA) of Bitcoin’s Fund Flow Ratio, which suggests that BTC investors have begun to trade on exchanges again. The metric has slumped to 0.05, a level that serves as a major support when the ratio stops declining, and is now slightly rebounding.
Avocado said the recovery historically occurs at the end of a bear market or halving event and at the onset of a bull phase. It usually leads to substantial long-term rallies in bitcoin’s price.
The second metric is the 30-day SMA of Bitcoin’s Estimated Leverage Ratio, which is currently showing signs of recovery and has formed a critical support range between 0.15 and 0.175.
“With the approval of futures ETFs after 2021 and the recent positive news regarding Bitcoin options trading, I believe the influence of this metric will continue to grow,” Avocado stated.
The analyst further highlighted the 30-day Exponential Moving Average (EMA) of Bitcoin’s Binary Coin Days Destroyed (CDD), which is currently hovering between 0.1 and 0.3. This indicates that long-term holders are accumulating BTC. According to Avocado, a significant increase in the value of this metric often signals the end of a bull market.
Bitcoin Up 7.5% Weekly
Avocado’s analysis comes as BTC records a 7.5% surge in the past week, triggered by the Federal Reserve reducing its interest rate by 50 basis points. The Fed’s move increased cash flow in the U.S. and intensified activities in bitcoin’s futures and perpetual markets, giving room for a surge in open interest and, subsequently, an increase in the asset’s value.
According to data from CoinMarketCap, BTC was worth $63,500 at the time of writing, having recorded a slight increase in the past 24 hours.
