The metrics examined measure the momentum and growth of user adoption of the bitcoin blockchain user adoption. A faster pace and increasing acceleration of adoption may indicate the beginning of a new cycle phase. This analysis considers, among other signals, the number of wallets and their changes, as well as their size in terms of bitcoin holdings.
In this category, we examine insights from traders’ positions in derivatives markets to understand the outlook and sentiment of investors with a short-term focus. In particular, the relationship between put prices and trading volumes, as opposed to call volumes, provides valuable insights.
Macro insights help determine whether prevailing global financial conditions are conducive to emerging bitcoin cycle phases. Traditional financial macro measures are assessed to determine the appeal of the macro cycle for favourable bitcoin price developments, in particular the prevailing interest rate environment.
In order to contextualise the current state of the bitcoin cycle, it is essential to monitor miner activity. It is an integral part of the health of the network and historically has a strong relationship with price and cost of production. The metrics we monitor include aggregate computing power and various profitability proxies.
In this category, we examine a number of ratios that integrate on-chain data analysis with price information for bitcoin. These ratios help determine whether the current spot price of bitcoin is overvalued or undervalued relative to current indicators of on-chain activity indicators, such as active market participants. In general, lower ratios indicate that we are near a cycle bottom, while higher ratios indicate the opposite.
Technical indicators are powerful tools for evaluating the bitcoin market, as they provide insight into trends using historical price and volume data. These quantitative and systematic tools offer a deeper understanding of the market and potential shifts in the bitcoin cycle.
In this category, the analysis focuses on investor confidence in bitcoin marketplaces, such as exchanges, as well as the health of gateway vehicles such as major stablecoin markets. A stable and robust exchange environment tends to support bullish market cycles, as trust is high, and investors have confidence in the system.
