• Bitcoin has staged a substantial rally of 29% since the beginning of the year, leading investors to speculate whether this is a bull trap or the start of a new bull market.
• On-chain analysis company Gassnode published a list of 10 indicators to answer this question, with four indicators already confirming the end of the bear market, two indicators in progress, and four indicators yet to be triggered.
• Bullish indicators include Realized Cap HODL Waves, a healthy increase in miner revenues, and an uptick in blockspace congestion.
As the crypto markets have continued to soar in 2021, investors have been speculating whether this is a bull trap or the start of a true bull market. To answer this question, renowned on-chain analysis company Gassnode has recently published a list of 10 indicators to provide a clue as to whether Bitcoin is nearing the end of its bear market.
The first indicator which has already been triggered is Realized Cap HODL Waves (LTH). This indicator states that historically, an intersection between the Realized Price * 0.7 and the 200D SMA * 0.6 price model occurs during the lowest phases of bear markets. This intersection, which has occurred in the last few weeks, indicates that the bear market may be ending.
The second indicator which suggests an end to the bear market is a healthy increase in miner revenues. This indicates that there is a competitive fee market, as the 90-day SMA of miner fee revenue has surpassed the 365-day SMA. This suggests that there is a “constructive uptick in blockspace congestion.”
Other bullish indicators include a notable increase in Net Network Growth, a surge in active entities on the Bitcoin network, and a decrease in Bitcoin’s supply held in long-term holders. Additionally, Gassnode has noted that two indicators are “in progress,” and four indicators have not yet been triggered.
Despite these positive indicators, there is still a lot of skepticism among analysts about whether Bitcoin has really found its bottom. However, Gassnode’s analysis provides some insight into whether the bear market is truly over or if this is merely a bull trap. With four indicators already confirming the end of the bear market and two indicators in progress, it appears that Bitcoin is on track to stage a substantial recovery.