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.
Growing
List
of
On-chain/Technical
Indicators
Say
Bitcoin
Bottom
Is
In
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
market
cycles
also
suggests
that
the
world’s
largest
cryptocurrency
by
market
capitalization
might
be
in
the
beginning
stages
of
a
near-three-year
bull
market.
According
to
analysis
from
crypto-focused
Twitter
account
@CryptoHornHairs,
Bitcoin
is
following
exactly
in
the
path
of
a
roughly
four-year
market
cycle
that
has
been
respected
perfectly
now
for
over
eight
years.
Elsewhere,
a
widely
followed
Bitcoin
pricing
model
is
sending
a
similar
story.
According
to
the
Bitcoin
Stock-to-Flow
pricing
model,
the
Bitcoin
market
cycle
is
roughly
four
years,
with
prices
typically
bottoming
somewhere
close
to
the
middle
of
the
four-year
gap
between
“halvings”
–
the
Bitcoin
halving
is
a
four-yearly
phenomenon
where
the
mining
reward
gets
halved,
thus
slowing
the
Bitcoin
inflation
rate.
Past
price
history
suggests
that
Bitcoin’s
next
big
surge
will
come
after
the
next
halving
in
2024.
But
Macro
Headwinds
Could
Send
Prices
Lower
This
Week
All
of
the
above-noted
indicators
suggest
Bitcoin
is
currently
a
great
long-term
buy.
It’s
important
to
stress
the
“long-term”
here.
That’s
because
the
macro
headwinds
that
pummelled
the
world’s
largest
cryptocurrency
by
market
capitalization
have
not
completely
disappeared
just
yet.
Indeed,
multiple
macro
strategists
have
noted
that,
going
into
this
week’s
crucial
Fed
policy
announcement,
there
is
a
significant
risk
that
markets
may
be
underestimating
the
Fed’s
resolve
to
1)
continue
raising
US
interest
rates
and
2)
hold
them
at
elevated
levels
for
some
time.
Money
markets
are
currently
pricing
that
the
Fed
delivers
just
50
bps
in
further
rate
hikes
–
one
on
Wednesday
(taking
rates
to
4.50-4.75%)
and
one
in
March
(where
rates
then
peak
at
4.75-5.0%).
Markets
then
expect
a
cutting
cycle
to
begin
in
earnest
before
the
end
of
2023.
Now,
such
market
pricing
isn’t
ridiculous
–
inflation
in
the
US
is
dropping
rapidly
and
looks
likely
to
soon
fall
back
to
the
Fed’s
2.0%
target,
while
multiple
economic
leading
indicators
are
flagging
the
likelihood
that
the
economy
enters
recession
later
this
year.
The
market’s
view
appears
to
be
that
the
Fed
will
want
to
start
easing
to
support
growth.
And
if
the
market’s
expectations
about
the
economy
are
right,
then
the
Fed
probably
will
start
easing
later
this
year.
But,
judging
by
recent
commentary
from
officials,
the
Fed
is
nowhere
near
ready
to
signal
an
easing
bias.
The
2021
“transitory”
inflation
debacle
badly
damaged
the
central
bank’s
credibility,
and
the
Fed
wants
to
continue
to
signal
an
intent
to
take
a
tough
stance
on
inflation.
Fed
Chair
Jerome
Powell
and
co.
may
well
signal
that
the
bank
intends
to
press
ahead
with
more
than
another
50
bps
in
rate
hikes,
which
would
jolt
markets,
especially
risk
assets,
in
the
short
term.
Bitcoin’s
big
January
run-up
could
stumble
on
the
first
day
of
February
in
such
an
instance.
Technicians
have
flagged
a
lack
of
major
support
levels
ahead
of
the
$21,500
area,
which
could
easily
be
retested
in
such
a
scenario.
A
retest
of
$20,000
and
the
200-Day
Moving
Average
and
Realised
Price
just
below
it
should
also
not
be
ruled
out.
What
would
be
most
interesting
would
be
how
Bitcoin
would
respond
at
such
levels.
Given
all
of
the
above
indicators
signaling
that
the
bear
market
is
over,
many
dip
buyers
may
be
eager
to
get
their
hands
on
Bitcoin
at
$20,000
once
again.