The chain analysis company CryptoQuant revealed five bitcoin metrics that tell us what’s going on under the surface.
These are the top five bitcoin indicators to watch
In a new post on X, CryptoQuant discusses the origin of real signals from on-chain data, while price movements provide only surface-level narratives. The analytics company shares its top five bitcoin metrics that help identify these signals.
The first indicator is “Achieve Price,” a popular indicator that can be an estimate of the average cost basis for investors on the BTC network. Historically, it often plays a role in the main support/resistance level of cryptocurrencies.
There are some different changes in this indicator, and the following shows prices specifically implemented for short-term holders.
The trend in the short-term holder Realized Price during the last few years | Source: CryptoQuant on X
As shown, Bitcoin price is currently trading above the implementation price of short-term holders, meaning members of the queue are in a net profit state.
The next indicator is the “Output Profit Margin of Expenditure” (SOPR), which measures whether BTC investors are selling or transferring their tokens for net profit or loss.
The value of the indicator is greater than 1, which means the holder participates in profitability, and the value under this threshold indicates the dominance of the loss realization. As can be seen from the figure below, short-term holders have recently demonstrated the former behavior.
Looks like the indicator's value has been above 1 recently | Source: CryptoQuant on X
A large surge in profits in the market can provide impedance for Bitcoin prices, and losses may lead to a low point. One indicator that can imply that these behaviors may be more likely to occur is the next indicator of interest: “Unrealized Profit/Loss” (NUPL).
The indicator tells us that, as the name implies, the unrealized net profit and loss that bitcoin investors are carrying as a whole.
The data for the NUPL of the entire BTC network over the cryptocurrency's existence | Source: CryptoQuant on X
Usually, as the holder grows, the holder becomes more inclined to make profits. Therefore, market loss balances that tend to be profit-oriented (i.e. high NUPL) in the market may lead to motivational driving of profit realization.
On the other hand, the dominance of the loss (low NUPL) can mean that profits are tempting to run out, which can facilitate the bottom-water hand yielding to transfer coins to more decisive entities when the bottom-formation is formed.
The fourth indicator is the supply allocation between short-term holders and long-term holders. The short-term holder, already mentioned earlier, has been formally defined as a buyer in the past 155 days. Investors who manage to exceed this threshold are called long-term holders.
The supply of the long-term holders has seen a small rebound in recent days | Source: CryptoQuant on X
Typically, the increase in supply of long-term holders indicates that behavior among investors is growing. As shown, the indicator declined earlier when firm hands participated in profitability, but recently, it showed signs of turnover.
Finally, there is open interest, which is an indicator that measures the total amount of capital in contracts related to Bitcoin in the futures market.
The USD-denominated Open Interest of BTC | Source: CryptoQuant on X
It is evident from the chart that Bitcoin open interest has exploded recently with new records, a sign that speculation has already started. This is usually before the price fluctuates.
BTC price
Bitcoin has seen some callbacks over the past day as its price recovered by $108,000.
BTC has been flat over the past few days | Source: BTCUSDT on TradingView
Featured images from dall-e, charts from cryptoquant.com, tradingview.com
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