These 3 Indicators Show Bitcoin will be Bullish!

Bitcoin's price had shown its highest price in 2023 at $23,350, January 22, 2023. The price is an increase of +40% starting from the beginning of 2023.

This rise could be a sign that Bitcoin's price is likely to recover and head towards a bullish trend, indicated by the following three indicators: MVRV, NUPL, and Rainbowchart.

Market Value to Realized Value (MVRV)

MVRV is the ratio between actual valuation (MV) and realized valuation (RV). Valuation is actually the marketcap value in realtime, namely the total supply multiplied by the current price. Meanwhile, realized valuation is the product of the time between the total supply and the average purchase price. MVRV value > 2 means the asset is being overvalued and MVRV is in the range of 0 and 1 means the asset is being undervalued.

From the CryptoQuant data source, the MVRV Bitcoin as of the latest data, January 22, 2023, shows a figure of 1.15. Previously, MVRV has consistently been below number 1 since the FTX case in early November 2022. With an MVRV of 1.15, bitcoin is out of the undervalued status and is likely to form an uptrend.

Net Unrealized Profit and Loss (NUPL)

The NPUL indicator expresses the level of profit and loss conditions of asset holders. The pivot of NPUL is 0 with a value below 0 meaning more asset holders are at a loss. Conversely a value above 0 means more asset holders are experiencing profits.

Reporting from Glassnode, NUPL Bitcoin again touched a value above 0 on January 13, 2023 and as of the latest data, January 22, 2023, the NUPL value was at 0.15.

In the indicator, this area of numbers has escaped capitulation where investor expectations have begun to recover. When compared to the previous figure, 0.15 is the highest NUPL figure since mid-August 2022, but still below the June 2022 NUPL of 0.21. With the upward momentum earlier this year, it is likely that NUPL Bitcoin touched the 0.21 mark before correcting again.

Price Bounces On Rainbowchart

In the previous Coinvestment article, it was mentioned that the price of Bitcoin on the rainbowchart indicator already shows the lowest indicator level which usually the price of Bitcoin will bounce up if it enters the area.

Bitcoin has already entered the bottom area of the indicator at the beginning of November 2022 and as of the latest data, January 20, 2023, Bitcoin entered the area of 1 level above the bottom area.

This shows that Bitcoin is testing historical data where previously, the price of Bitcoin always rebounded when it touched the bottom area. If the test is successful, then it is likely that the Bitcoin price is heading towards the buy-accumulate border area: $30,000 – $33,000.

It should be noted that these signs could likely be bullish signs only for the short term until the second quarter (Q2) of 2023 and not the start of bullruns.

This is said because historical data still needs to be considered, namely the Bitcoin halving phenomenon which usually indicates that the bull run is actually just starting.

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