The cryptocurrency market is poised for a rescue rally for Bitcoin and altcoins, according to on-chain metrics from crypto data tracker Santiment. Analysts noted in Santiment’s June report that sentiment among market participants has been negative since the last week of May, a sign that “bullish prices are inevitable.”
Traders may have capitulated and analysts identify this as an ideal time for traders on the sidelines to buy Bitcoin as well as altcoins, ahead of the upcoming recovery in the market.
The two prominent stories are DePIN and airdrops.
Solana, Toncoin, and Cardano rank among the top 10 altcoins that recorded price gains over the past 24 hours, according to CoinGecko data.
Three Signs That a Cryptocurrency Rally Is Coming
Cryptocurrency markets saw price movements across most altcoins in the top 30, with memecoins, the Artificial Intelligence (AI) token category emerging as the main stories delivering the highest gains.
30-day MVRV and 365-day MVRV
Market Value to Realized (MVRV) is an important on-chain indicator used to determine cryptocurrency tops and bottoms. The 30-day MVRV (orange line in the chart below) has fallen into negative territory.
Analysts at Santiment see this as an ideal time for traders to sit on the sidelines and buy Bitcoin or add to their positions in Bitcoin or altcoins ahead of the rally. The 30-day MVRV is currently at -2.72% and the risk associated with adding to trading positions is lower than usual.
365-day MVRV is dropping to near 0%, however, it may take longer than expected for Bitcoin to reach $70,000. Either way, a recovery is most likely for Bitcoin by July 2024.
Bitcoin Price and MVRV 30-Day, 365-Day | Source: Santiment
Daily operating address
Bitcoin Network Sees Increased Number of Active Addresses. Santiment data shows that June ended with the highest number of active addresses in nine weeks.
While Bitcoin network activity has declined since its all-time high on March 14, signs of recovery suggest it is trending back towards the top.
Higher activity is related to asset relevance and demand from traders on exchange platforms.
Daily Active Addresses and Bitcoin Price | Source: Santiment
Bitcoin Supply on Exchanges
The supply of Bitcoin on exchanges is currently relatively low compared to the highs seen in March, as shown in the Santiment chart below. The relatively low supply equates to less selling pressure on Bitcoin and a higher chance of the asset’s price recovering.
Bitcoin Supply on Exchanges as % of Total Supply and price | Source: Santiment
Bullish Potential for Bitcoin and Altcoins
Trader sentiment data shows negative sentiment for nearly six weeks. Santiment noted that persistent negative sentiment from traders almost always leads to price increases.
The current period of negative sentiment among traders is the longest in more than 2 years.
TWeighted Acoustics (BTC) | Source: Santiment
Cryptocurrency data trackers have recorded an increase in mentions of “buying the dip” on social media platforms. With traders driving demand for Bitcoin and altcoins, a recovery in the largest asset by market capitalization is possible.
Santiment analysts noted in the report that BTC and altcoins saw a price drop in late June, specifically June 28, which could be the real bottom.
The top stories this cycle have been DePin and airdrops, however Solana (SOL), Toncoin (TON) and Cardano (ADA) among the top 10 altcoins have started to recover with gains of 1% to 4% over the past 24 hours.
You can see the prices of coins here.
Minh Anh
According to FXStreet
