On-chain Metric Flashes First Bitcoin Buy Signal Since 2019 – Here is What You Need to Know
According to crypto data analytics firm CryptoQuant, an on-chain metric is giving off a definitive Bitcoin buy signal for the first time since 2019. CryptoQuant’s Profit and Loss (PnL) Index, an index constructed from three on-chain indicators relating to the profitability of the Bitcoin market, recently crossed back above its 365-Day Simple Moving Average (SMA) after a prolonged spell below it.
The PnL Index chopped either side of its 365-Day SMA in 2020 and 2021. The last time it broke decisively to the north of its 365-Day SMA after a prolonged period below it was back in 2019, a few months after the market had bottomed. “The CQ PnL Index has given a definitive buy signal for BTC,” CryptoQuant note, before stating that “the index crossover has implied the start of bull markets in past cycles”.
“It is still possible for the index to fall back below,” CryptoQuant cautioned in a blog post. But the Bitcoin bulls will be adding this indicator to a growing list of other on-chain and technical signals that are all also flashing bullish signs.
As discussed in a recent article, an increasing confluence of indicators (looking at eight pricing model, network utilization, market profitability and balance of wealth signals) tracked by Glassnode are suggesting that Bitcoin could be in the early stages of recovering from a bear market.
And these aren’t the only on-chain indicators flashing signals of an incoming bull market. According to analysis posted on Twitter by @GameofTrade_, 6 on-chain metrics including the Accumulation trend score, Entity-adjusted dormancy flow, Reserve risk, Realized price, MVRV Z-score and Puell multiple are “calling for a generational long-term buying opportunity”.
Meanwhile, analysis of Bitcoin’s longer-term
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