The Bitcoin Market’s Return to Profitability in 2023 is a Massive BTC Bull Signal, Widely Followed On-chain Indicator Suggests

cryptonews.com:

Bitcoin’s ferocious January price rally launched much of the market back into profitability for the first-time months. The Bitcoin market’s return to profitability is seen in the resurgence in the price, last at around $23,500, above the so-called “Realized Price”, which is the average BTC price at the time when each BTC token last moved.

Bitcoin’s Realized Price was last around $19,850, according to data presented by crypto analytics firm Glassnode. Technicians view a break above the Realized Price as a signal of a meaningful shift in the market’s medium-term momentum, much how they view a break above or below the 200-Day Moving Averages (which Bitcoin also recently broke decisively above).

But the Bitcoin price’s relationship to its Realized Price and what this means for the market outlook is far more nuanced. That’s according to analysts at Glassnode, who present a number of more advanced models that look at the differential between the Bitcoin price and Realized price to determine whether the market is reaching a top or bottom, or about to embark on a prolonged bull or bear market.

And these metrics are sending a unified signal. The medium-long term outlook for the Bitcoin market is looking good, if history is anything to go by.

Glassnode presents a metric called the Market Value Realized Value (MVRV) Ratio – A ratio between the current market, or spot, price, and the Realized Price. They then introduce ratio levels that they deem as suggesting the market is at an extreme – 0.8 and 1.0, below which the market is viewed as extremely weak, and 2.4 and 3.2, above which the market is viewed as extremely strong.

As can be seen in the above graph, the MVRV ratio recently recovered back above 1.0 after falling below the