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Bitcoin's On-Chain Metrics Hit Records in Many Areas

Tue, 07/05/2022 - 13:43
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Gamza Khanzadaev
Recent BTC analytics stats show mixed sentiment
Bitcoin's On-Chain Metrics Hit Records in Many Areas
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At a time of misunderstanding, fear and greed on the crypto market, it is important to have a solid foundation for making investment decisions, and that is where data from reliable crypto analysts, be it Glassnode or Santiment, often featured in our reviews, comes in handy.

Let's start with rather positive news from Glassnode, according to which the number of "non-zero" Bitcoin wallets reached an all-time high of 42,349,855 wallets. However, the previous record was recorded the day before, on July 4, which indicates a continuing trend and a massive emergence of new BTC investors. At the same time, wallets with balances over 0.01 BTC and 0.1 BTC are also growing, with values of 10,414,216 and 3,681,161 unique addresses, respectively.

On a less positive note, Glassnode reports that the Relative Unrealized Loss (RUL) figure reached a three-year high of 0.498. The metric reflects the total loss in USD of all existing Bitcoins, whose price at the time of realization was higher than the current price of BTC. Of course, the value of 0.498 for RUL is not a limit on the bear market; during the previous massive market correction in 2018, the indicator reached values of 0.71. However, the further decline of the indicator quite clearly signaled the emergence of a new bullish momentum, especially when applied together with Relative Unrealized Profit (RUP) and the overall Net Unrealized Profit/Loss (NUPL) metric.

In negative news, Santiment reported today that Bitcoin's average profitability is -45% year-to-date. This is the lowest figure since 2018. The Market Value to Realized Value (MVRV) was used to announce the diagnosis. On the one hand, this is a rather sad fact, but on the other hand it is a good signal for possible entry onto the market. The indicator is currently at the bottom of 2018, when the price of one BTC was only $3,600.

On-chain metrics do not absolve investors of responsibility

It is important to understand that on-chain metrics are not a panacea. The market has only just arrived at similar indicators to the bottom of 2018 and may stay there for a long time, now and then making squeezes and liquidating impatient investors. Nevertheless, careful application of proven indicators and careful analysis will definitely help any crypto enthusiast to at least significantly reduce the risk of losses and not to sink in this raging crypto market.

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About the author

Financial analyst, trader and crypto enthusiast.

Gamza graduated with a degree in finance and credit with a specialization in securities and financial derivatives. He then also completed a master's program in banking and asset management.

He wants to have a hand in covering economic and fintech topics, as well as educate more people about cryptocurrencies and blockchain.