Bitcoin Bulls Eye Upswing as Key Metrics Signal Potential Rally

Bitcoin's potential bullish move is being signaled by three key metrics, according to analytics firm Santiment. The crypto market intelligence platform has identified a set of on-chain indicators that suggest a possible upswing for the leading cryptocurrency by market capitalization.

Firstly, Santiment highlights the average returns of wallets that have been active in the past 30 days. Currently, these returns are sitting at around -2.9%, which is below the 0% threshold. Historically, accumulating Bitcoin when wallets' average returns are under 0% has proven to be a statistically strong time to buy or add to one's position.

Secondly, the period of dormancy of coins is another crucial factor. Santiment notes that older BTC tokens are circulating the market at a healthy rate, indicating a potential rally. This is because dormant tokens are moving at a relatively high frequency, which means stagnant coins are continuing to move and circulate. During elongated bull runs, the mean dollar age of Bitcoin tends to get younger, while bear runs are often characterized by concerningly long periods of dormancy.

Lastly, the supply of Bitcoin on crypto exchange platforms is the final sign of a possible move to the upside. The supply of BTC sitting in known exchange wallets has stayed relatively low after the major exodus of coins from exchanges into cold wallets throughout the tail end of 2024. Currently, 7.6% of Bitcoin is sitting in known exchange wallets, compared to 9.92% six months ago.

At the time of writing, Bitcoin is trading for $98,427, with a fractional decrease over the last 24 hours. While these metrics suggest a potential bullish move, it is essential to remember that the cryptocurrency market is highly volatile, and investors should always conduct their own research before making any high-risk investments.