Bitcoin Bull Cycle is Not Over Yet, Alerts Critical On-Chain Indicator

Yerevan (CoinChapter.com) — As Bitcoin returns to lower levels after establishing a record high near $65,000, speculations about its bullish exhaustion are rising. Now trading around $56,000, the flagship cryptocurrency is losing its market share to rivaling crypto assets, including Ethereum, which rose more than 16 percent on Tuesday.

Nevertheless, one on-chain indicator has projected BTC in a bullish light, ignoring its recent correction. Dubbed as Bitcoin Reserve Risk, the indicator states that BTC/USD has more fuel to continue its upside price rally, perhaps towards a $100,000-valuation.

Reserve Risk Indicator

Reserve Risk is a cyclical indicator. It tracks risk-reward balance relative to the confidence and conviction of long-term holders. When confidence is high, and the price is low, the risk/reward comes for investment. An opposite case with the high price and low confidence indicates an opposite attraction, and buying is not recommended at this point.

Calculations are made using parameters such as Bitcoin Days Destroyed (BDD). Example: Josh buys 1 BTC and keeps it in his wallet for 10 days. Afterward, he sells the token, which would then ‘destroy’ 10 BTC Days as it moves from Josh’s wallet to a different one (10 BDD). It is notable that merely transferring BTCs from one wallet to another does not destroy the tokens. It merely represents their lifecycle in a wallet.

As the graph above suggests, every time the Reserve Risk hits the red zone, it increases the selling pressure in the bitcoin spot market. Conversely, a greened Reserve Risk reading indicates a bullish bias.

“Reserve Risk via Glassnode looks like we’re still in the middle of this bull cycle with BTC at $58k. Over 0.02 is when it looks more ‘toppy’ or potential end of the cycle,”

noted Stephan Livera.

Livera suggests that this is not the first time for bitcoin to be in such a position, expecting the price to recover and go bullish.

Bitcoin Price Now

The bitcoin price climbed Monday, going as high as $58,812 around 13:00 UTC (8 a.m. ET), which is still over $6,000 off from its record high being $64,829, set on April 14.

Also, besides Reserve Risk, many other indicators are predicting price increase too. Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD) and simple Wave Count all suggest that BTC continues its way to bullish.