With bitcoin now making six-figure territory feel normal and higher prices seemingly inevitable, analysis of key on-chain data provides valuable insights into the underlying health of the market. By understanding these metrics, investors can better anticipate price movements and prepare for potential market spikes or even any upcoming pullbacks.
Terminal price
He Terminal price metric, which incorporates the Coin days destroyed (CDD), while taking into account bitcoin supply, has historically been a reliable indicator for predicting bitcoin cycle peaks. Coin Days Destroyed measures the speed of coins being transferred, considering both the duration of the holding and the amount of bitcoin moved.
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Currently, the price of the terminal has exceeded $185,000 and is likely to rise to $200,000 as the cycle progresses. Given that bitcoin has already surpassed $100,000, this suggests that we may still have several months of positive price action ahead of us.
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The multiple Puell evaluates miners' daily earnings (in USD) relative to their 365-day moving average. After the halving, miners experienced a sharp drop in revenue, creating a period of consolidation.
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Now, the Puell Multiple has risen above 1 again, indicating a return to profitability for miners. Breaking this threshold has historically indicated the latter stages of a bull cycle, often marked by exponential price rallies. A similar pattern was observed during all previous bull runs.
MVRV Z-Score
He MVRV Z-Score Measures market value relative to realized value (average cost basis of bitcoin holders). Standardized on a Z-Score to take into account the volatility of the asset, it has been very precise in identifying the peaks and troughs of the cycle.
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Currently, bitcoin's MVRV Z-Score remains below the overheated red zone with a value of around 3.00, indicating that there is still room for growth. While declining spikes have been a trend in recent cycles, the Z-Score suggests the market is far from reaching a euphoric high.
Active steering feeling
This metric tracks the 28-day percentage change in active network addresses along with the price change during the same period. When price growth exceeds network activity, it suggests that the market may be overbought in the short term, as positive price action may not be sustainable given network utilization.
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Recent data shows a slight cooldown after bitcoin's rapid rise from $50,000 to $100,000, indicating a period of healthy consolidation. This pause is likely setting the stage for sustained long-term growth and does not indicate that we should be bearish in the medium to long term.
Spent production profit ratio
He Spent Production Profit Ratio (SOPR) measures the profits made from bitcoin transactions. Recent data shows a pick-up in profit taking, which could indicate that we are entering the later stages of the cycle.
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One caveat to consider is the increasing use of bitcoin ETFs and derivative products. Investors may be moving from self-custody to ETFs for their ease of use and tax advantages, which could influence SOPR values.
Days of courage destroyed
Multiple Value Days Destroyed (VDD) expands CDD by weighting larger, long-term holders. When this metric enters the overheated red zone, it often indicates major price spikes as the market's largest and most experienced participants begin to cash out.
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While bitcoin's current VDD levels indicate a slightly overheated market, history suggests it could maintain this range for months before peaking. For example, in 2017, VDD indicated overbought conditions almost a year before the peak of the cycle.
Conclusion
Together, these metrics suggest that bitcoin is entering the latter stages of its bull market. While some indicators point to a short-term cooldown or slight overextension, most highlight a substantial remaining rally throughout 2025. Key resistance levels for this cycle are likely to emerge between $150,000 and $200,000, with metrics like SOPR and VDD that provide clearer signals as we get closer to the peak.
For a more in-depth look at this topic, watch a recent YouTube video here: What's happening on chain: bitcoin update
Disclaimer: This newsletter is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
