For Bitcoin (BTC), only one variable needs to turn positive for the next uptrend to begin, says veteran crypto analyst David Puell.
Puell, the inventor of the Puell Multiple metric of the same name, announced yesterday December 17, as a result arguedthat the ongoing downtrend may soon be over.
Puell: Only network activity is missing
While many crypto analysts are warning of a Bitcoin price crash with retracements to $12,000 or lower in the near term, there are still some positive voices regarding the price action in the medium term.
For Puell, the on-chain metrics show that two out of three variables are already correct for the bear market to turn back into a bull market.
First, long-term holders (LTH) are sticking with their Bitcoin investments despite massive losses of up to 70% from the last all-time high.
Second, short-term “speculators” are particularly affected by current prices. As a result, these “tourists” have almost completely left the market.
According to Puell’s assessment, the only thing missing now is that the activity of the network as a whole is clearly increasing again.
“On-chain, three conditions must be met for an uptrend: 1.) Long-term investors are holding; 2.) Heavy losses for short-term speculators; 3.) An overall increase in network activity,” as the expert notes on Twitter. To which he adds:
“Personally, I already see 1 and 2, but there is still room for improvement with 3.”
Moreover, the slowly improving macroeconomic situation and the growing “immunization” against the risk of the domino effect contagion in the crypto industry could provide additional support to create a trend reversal soon.
Bitcoin price is near $16,700 at press time, according to data from Cointelegraph Markets Pro and TradingView.
A half cycle like any other?
This assessment is in line with other analysts, who are also becoming increasingly optimistic about price developments.
Including the Dilution-proof Trader, which indicates that Bitcoin price is increasingly behaving like previous bear markets.
He sees evidence of this in the MVRV-z score, a key figure that compares actual market capitalization to realized market capitalization.
The metric’s price chart indicates a classic low in a bear market for Bitcoin, which is why it is resistant to dilution concludesthat the market-leading cryptocurrency is “just doing what it’s supposed to at this point in a halving cycle.”
Cointelegraph previously identified MVRV-z as one of the metrics that shows “striking similarities” to previous price cycles.