Bitcoin Price Surges: CryptoQuant Identifies Three Reasons for the Rally

By Tsunami 05/23/23 2:50 AM

As Bitcoin (BTC) prices continue to soar, investors and enthusiasts are eagerly seeking an explanation for the sudden surge. According to CryptoQuant, a prominent cryptocurrency analytics platform, there are three compelling reasons why BTC prices are on the rise.

Onchain Cycle Indicators in Recovery Phase

CryptoQuant’s analysis reveals that various on-chain cycle metrics, including MVRV (Market Value to Realized Value), NUPL (Net Unrealized Profit/Loss), Fuel Multiple, and SOPR Ratio (Spent Output Profit Ratio), are signaling a shift from recession to recovery.

These indicators suggest that BTC prices are expected to experience an upward trend in the long run, diminishing concerns of a significant price decline. With the on-chain cycle metrics showing positive signs, investors can find reassurance in the overall market sentiment.

BTC’s Growing Intrinsic Value

Although there has been a recent adjustment trend in BTC prices, this appears to be a short-term phenomenon caused by network overheating. CryptoQuant’s examination of hashrates and difficulty metrics reveals that the intrinsic value of Bitcoin is steadily increasing.

These fundamental indicators reflect the network’s security and stability, solidifying the notion that BTC’s underlying value is growing. Consequently, any price corrections observed should be viewed as temporary rather than a long-term decline, presenting a potential buying opportunity for investors.

Price Support Line: 1M to 3M Realized Price – UTXO Age Bands

At the time of writing, Bitcoin’s price is hovering around $26.8K, aligning with the 1M to 3M Realized Price – UTXO Age Bands. This particular average unit price of short-term holders has historically acted as a robust support line during previous recovery phases.

Considering this historical trend, it is reasonable to expect that the price will find support at this level once again. Even if BTC were to breach the $26.8K support level, the growing intrinsic value of BTC serves as a positive influence, suggesting that any price drop would likely be temporary rather than a sign of a long-term decline.

Concluding Remarks

The surge in BTC prices can be attributed to several factors. CryptoQuant’s analysis points towards positive onchain cycle indicators, BTC’s growing intrinsic value, and the historical price support provided by the 1M to 3M Realized Price – UTXO Age Bands. While short-term fluctuations and corrections are a part of any market, investors are encouraged to consider these reasons as catalysts for continued growth and to potentially capitalize on any temporary dips in BTC prices.

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