Key Points
- Bitcoin’s price bounce back and ETF inflows indicate a bullish market outlook.
- On-chain indicators, including mean age of investment and MVRV ratio, signal room for growth.
The cryptocurrency market has recently seen liquidation surpassing $500 million in the last 24 hours. Despite this, Bitcoin’s price has shown resilience, hitting a low of $94,306 before bouncing back to a market price of $97,727.
This recovery in Bitcoin’s price coincides with a surge in institutional demand, undermining the short-term correction and indicating a bullish market outlook.
US Spot ETFs Attracting Significant Inflows
US spot Bitcoin ETFs have seen a daily total net inflow of nearly $440 million, indicating a race among institutions to accumulate Bitcoin.
BlackRock led the institutional investments with a $295.63 million inflow, followed by Fidelity with $210.48 million worth of Bitcoin accumulated over the last 24 hours.
This has resulted in the total net assets of US spot ETFs reaching $107.76 billion, or 5.65% of Bitcoin’s market cap. Out of 12 registered Bitcoin ETFs, five recorded a net positive flow, three recorded a net outflow, leaving four ETFs with a net zero flow.
As Bitcoin’s recovery gains momentum, on-chain indicators are starting to flash a buy signal.
Mean Age of Investment Indicates Market Recovery
One of the less-discussed metrics in crypto, the mean dollar invested age, supports this buy signal as the market gradually recovers from the recent retracement.
Based on the on-chain indicator, the mean age of Bitcoin investments has decreased to 439 days. This translates to a 31% younger mean age over the past 60 weeks.
Similarly, for XRP, the mean age of investment has decreased to 865 days, making it 22% younger over the past 14 weeks. Meanwhile, Dogecoin’s mean investment age has dropped to 370 days, making it 31% younger over the past eight weeks.
The mean dollar age invested line drops for Bitcoin, and the top altcoins signal that the older and stagnant wallets are circulating the dominant coins. This circulation, coming from large key stakeholders or whales, marks a healthy signal for the bull run.
The mean age of investment is a critical indicator that has proved its mettle in the 2017 and 2021 bull markets. In the previous bull runs, the markets peaked and started going down when the mean ages started increasing or getting older again.
Therefore, despite the short-term price fluctuations in Bitcoin and the top altcoins, the decrease in the mean age of investment signals a medium to long-term bullish market.
MVRV Ratio Suggests Room for Growth
Another key on-chain indicator for predicting the peak of the bull market is the market-value-to-realized-value ratio. This is the market cap ratio to each address’s average purchasing cost.
Currently, the MVRV ratio stands at 2.55 compared to the 2021 bull run peak of 3.68. In the 2017 bull run, the MVRV ratio peaked at 4.24 and 4.91 in 2013.
As the MVRV ratio continues to fall during consecutive bull runs’ peak, it remains a crucial signal for predicting bullish exhaustion. At 2.55, the on-chain indicator signals room for growth.
Bitcoin Targets New All-time High
As Bitcoin’s price bounces from the crucial support of $94,425, it marks a V-shaped recovery to challenge the short-term resistance trendline. The recovery rally has surpassed the 50 SMA line in the 1-hour chart.
Further, it tests the resistance confluence of the 38.20% Fibonacci level at $97,945 and the resistance trendline. The short-term pullback has resulted in a death cross in the early time frame and warns of a bearish crossover between the 200 and 100 SMA line.
As the recovery rally gains momentum with the rising ETF inflows, the chances of a breakout rally have fundamentally increased. However, Bitcoin’s price action showcases the formation of low-range price candles as they reach the resistance zone.
This warns of another potential pullback to retest the 23.60% Fibonacci level at $96,600. Nevertheless, with the on-shell indicator signaling a bullish run ahead, the breakout of the local support trendline will provide a buying spot point for price action traders.
With this breakout rally, the Fibonacci levels paint significant resistance at the 61.80% Fibonacci level near the $100,000 psychological mark. Closing above this will increase the chances of Bitcoin reaching the $103,647 mark, potentially creating a new all-time high.
Based on the Fibonacci levels, the price targets for a new all-time high are $106,145 and $109,333.
In summary, with the intraday recovery and on-chain signals, the bull run in Bitcoin shows the potential to sustain the minor hiccup.
