Six indicators on the necklace tell you: What stage of the BTC market cycle is the market in?

Author: Matt Crosby, Bitcoin Magazine; Compiler: Deng Tong, Golden Finance

With Bitcoin prices reaching six figures becoming the norm and higher prices seem a certainty, analysis of key on-chain data provides valuable insights into the underlying health of the market. By understanding these indicators, investors can better predict price movements and prepare for potential market peaks or even any upcoming pullbacks.

terminal price

The terminal price indicator combines Coin Days Destroyed (CDD) while taking into account the supply of Bitcoin, and has historically been a reliable indicator for predicting Bitcoin cycle peaks. Coin Days Burned measures how quickly coins are transferred, taking into account holding time and the amount of Bitcoin moved.

Figure 1: Bitcoin terminal price has surpassed $185,000.

Currently, the terminal price is over $185,000 and may rise to $200,000 as the cycle progresses. Since Bitcoin has crossed $100,000, this means we may still have several months of positive price action ahead.

PUELL multiple

The Puell Multiple evaluates a miner's daily revenue (in U.S. dollars) relative to its 365-day moving average. After the halving event, miners' income dropped sharply, forming a period of consolidation.

Figure 2: The Puell multiple has climbed above 1.00.

Now, the Puell multiple has moved back above 1, indicating that miners will return to profitability. Historically, exceeding this threshold indicates the late stages of a bull market cycle , usually marked by exponential price increases. A similar pattern has been observed in all previous bull markets.

MVRV Z score

The MVRV Z-score measures market value relative to actual value (the average cost basis for Bitcoin holders). Normalized to a Z-score to account for an asset's volatility, it is very accurate at identifying cycle peaks and troughs.

Figure 3: MVRV-Z score remains well below previous peak.

Currently, Bitcoin’s MVRV Z-score remains below the overheating red zone at around 3.00, indicating there is still room for growth. While declining peaks have been a trend in recent cycles, the Z-score suggests that the market is far from its euphoric peak.

active address sentiment

This metric tracks the 28-day percentage change in active network addresses and price changes over the same period. When price growth exceeds network activity, this indicates that the market may be overbought in the short term, as positive price movements may not be sustainable given network utilization.

Figure 4: AASI indicates overheating above $100,000.

Recent data shows that the market has cooled slightly after Bitcoin’s rapid climb from $50,000 to $100,000, suggesting that the market is in a healthy period of consolidation. This pause may set the stage for sustained growth in the longer term and does not mean we should be pessimistic about the medium to long term.

Expenditure output profit margin

Spending Output Profit Ratio (SOPR) measures the realized profits of Bitcoin transactions. Recent data shows an increase in profit-taking, which may indicate that we are entering the later stages of the cycle.

Figure 5: SOPR massive profit-taking cluster.

One issue to consider is the increasing use of Bitcoin ETFs and derivatives. Investors may switch from self-custody to ETFs for ease of use and tax benefits, which could impact SOPR value.

Days to value destruction

The value in days destroyed (VDD) multiple extends CDD by weighting larger long-term holders. When this indicator enters the overheated red zone, it often signals a major price spike as the largest and most experienced players in the market begin to cash out.

Figure 6: VDD is a bit hot, but not too hot.

While Bitcoin’s current VDD levels suggest the market is slightly overheated, history suggests Bitcoin is likely to remain in this range for several months before peaking. For example, in 2017, VDD indicated that overbought conditions were occurring nearly a year before the cycle peaked.

Summarize

Taken together, these indicators suggest that Bitcoin is entering the later stages of a bull market. While some indicators point to cooling or slight overexpansion in the near term, most point to considerable upside potential throughout 2025. Key resistance this cycle is likely to occur between $150,000 and $200,000, with indicators like SOPR and VDD providing clearer signals as we approach the peak.