Quantitative analyst Plan B says Bitcoin (BTC) is issuing flashing signals that strongly suggest that the leading digital asset by market capitalization is bottoming out and starting a new market cycle.
The pseudonymous analyst tells his 1.8 million Twitter followers that on-chain data indicates that more than half of BTC in circulation is now in a profit state.
The Plan B chart shows a cycle of BTC from the majority of profits, represented by red dots, to around half of profits, represented by dark blue dots.
According to the analyst, coins in profit ranging from 50% to over 60% are a strong signal of bottoming out.
“No more low signals: > 60% of all Bitcoins are in profit”
Plan B also has its eye on Bitcoin’s Long-Term Relative Strength Index, one of the most widely used momentum indicators that aims to determine whether an asset is oversold or overbought. Using the indicator on a 14-month scale, Plan B points out that BTC’s RSI is at all-time lows, suggesting that Bitcoin is deeply undervalued.
“Bitcoin RSI Won’t Stay Low Forever!”
Leading crypto analytics firm Glassnode also reported that on-chain metrics suggest Bitcoin is forming a bear market floor. In a recent report, the firm said The BTC accumulation trend score, which shows the aggregate intensity of active investor balance changes over the past month, mirrors the 2018/2019 bottoming process.
According to the analysis company,
“Throughout the capitulation at the start of 2022, the accumulation trend score indicates that significant accumulation by large entities has taken place, as well as the seizure of the recent bear market rally to $24,500 for the exit liquidity. At present, this metric suggests an equilibrium (neutral) structure in the market, which remains similar to the start of 2019.”
At the time of writing, Bitcoin (BTC) is trading at $20,767, flat on the day.
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