Bitcoin Crypto Quant Data Hints An Imminent Bitcoin Price Rally, Will It Be Strong?

Long-Term Bitcoin Metrics Show a Possible Turn in a Bear Market

Bitcoin is moving sideways during the better part of the week after bouncing off the monthly low around $17,900. The number one cryptocurrency has hinted at a possible breakout, but once again the bulls are losing momentum leaving BTC price stuck at its current levels.

At the time of writing, Bitcoin (BTC) is trading at $19,500 with a gain of 2% in the last 24 hours and sideways movement over the past week. Crab-like price action is repeated throughout the cryptocurrency market as large assets move either sideways or to the downside.

BTC price is moving sideways on the daily chart. source: BTCUSDT TradingView

Bitcoin making a convincing bottom?

Data from research firm Santiment Indicates Bitcoin has been moving sideways over the past four months with high volatility during that period. Regardless of the price of BTC, the research firm claims that the cryptocurrency may be heading to a bottom based on several metrics.

First, Santiment looked at the distribution of the cryptocurrency, or the amount of BTC currently being sold in the market. After an apparent collapse from its highs in 2021, the current bitcoin market, the research firm claims, looks like the period from 2017 to 2019.

As shown in the chart below, the price of bitcoin has seen its life expectancy in dollars (BTC) invested and its market capitalization decline to realized value, which is a metric used to gauge investor behavior. As shown in the chart below, when the MVRV collapsed, with the invested average dollar trending in the opposite direction, Bitcoin tended to move sideways.

Bitcoin BTC BTCUSDT 3 . Chart
Source: Santiment

This crab-like price could last for many years, but they are hinting that the cryptocurrency has finally reached a long-term bottom. Additionally, social volume, which is the number of people talking about Bitcoin on social media, is declining after the price action.

This indicates that levels of euphoria are low and approaching the lowest levels of 2018. During these times, there are usually levels of leverage and speculation in the market.

Santiment wrote the following about the similarities between the current Bitcoin price and its price movement of 2018. At the time, the cryptocurrency hit a new all-time high and went into a bear market for several years:

Bitcoin’s long-term metrics have shown encouraging signs of a turnaround for a few months now, even though prices are stuck in the mud. (…) Looking at the current state of long-term data is not as terrible as it might seem from an outside perspective. Of course, history does not repeat but it may rhyme.

Bitcoin BTC BTCUSDT Chart 2
Source: Santiment

This is when the price of BTC could push back into the bears

Despite the above data, the price of bitcoin has shown a high correlation with traditional stocks. The cryptocurrency is moving more and more along with the major old stock indices, such as the S&P 500 and Nasdaq 100.

At the same time, these assets were and are likely to continue to face fresh selling pressure as long as the US Federal Reserve (Fed) maintains its current monetary policy. The Fed started to slow inflation, raised interest rates and cut its balance sheet.

The latest US economic data, as reported by NewsBTC, indicates that the financial institution could continue to put pressure on inflation, stocks and Bitcoin. Although this status quo persists, the cryptocurrency market is unlikely to form a convincing bottom, or at least see its upside potential limited.

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