Bitcoin is poised to finish Q1 of 2022 on a strong footing. Bitcoin on-chain metrics continue to point to more bullish potential for the market, with the latest being Bitcoin velocity.
Bitcoin velocity is in a perfect state, says analyst
Crypto Quant (CQ) verified analyst, BinhDang, stated that he believes Bitcoin is in the “middle of a bull run.” This is going by the Bitcoin velocity metric provided by the crypto analytics platform.
The metric, which is read from 0 to 100, is essentially a measurement of the rate at which coins are circulating in the crypto economy according to CryptoQuant’s description.
According to BinhDang, the Bitcoin velocity metric is currently in a perfect state. The analyst explains that in previous bull runs, Bitcoin gets to new all-time highs after velocity peaks. Conversely, when velocity drops below 50, it usually marks the bottom of a bear market.
At the moment, the metric is stable at around 62.12 after rising sharply since nosediving in 2021. The current level does not point to any signs of a price peak and is equal to the beginning of 2017.
I see that the Velocity of BTC has increased sharply after being interrupted by the black swan, but there is no sign of the peak of this cycle; the current threshold is only equal to the beginning of 2017, the analyst said.
This indicates that the analyst sees more room for the market to go even higher. Increasing circulation points to growing adoption and market activity, which is one of the conditions that market analysts expect to drive Bitcoin’s price to new highs.
Meanwhile, the analysis is coming after CQ’s analysist revealed that the futures market shorts liquidations over the weekend that drove a price surge was good for the market as there was still disbelief among investors.
Bitcoin is closing in on three-month high
This week has already seen Bitcoin recover significant grounds in gains. At the moment Bitcoin is trading at around $47,600, up 1.29% on the day. Bitcoin also reached an intra-day high of about $48,200. Per data from CryptoRank, this high is only about 0.28% down from Bitcoin’s three-month high price.
Regardless, Glassnode has warned that Bitcoin may not be fully out of a bear market because market bottoms take time to form.
The process of bottom formation and investor capitulation in a bear market is often a lengthy and painful process, and Bitcoin is by no means out of the bearish woods yet, Glassnode said.