Bitcoin with an “extremely rare” buy signal, says the CEO of the crypto fund

Naked Markets

Su Zhu, co-founder and CEO of the Three Arrows Capital cryptocurrency hedge fund, says bitcoin (BTC) has just presented a rare bullish signal. As suggested by the “dormancy flow” indicator used in the on-chain analysis, it has reached a level seen only five times in the history of the cryptocurrency.

On-chain analysis. Bitcoin with a rare buy signal

Dormancy flow refers to the average number of days each issued BTC coin was dormant before it was issued. The indicator can be used to tell the time when market lows are drawn and to judge if the bull market is in relatively normal conditions.

– The dormancy flow buy signal is very rare, it has only occurred six times in history, including the current signal Su Zhu wrote.

Another on-chain indicator that Zhu says is noteworthy is the illiquid supply of bitcoin. Illiquid supply relates to BTC in portfolios with little sales history. When illiquid supply grows, it suggests no selling pressure on BTC and increases the chances of growth.

– Illiquid supply grows sharply from July 2021, following the accumulation trend from January 2019 to April 2021. – adds Zhu.

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According to Zhu, BTC is in a long period of accumulation with an overall bullish market structure.

Bitcoin is in a multi-year process of drawing higher highs and higher lows, with 2021 being a relatively calmer year as a side-to-side accumulation time. Buying highs or selling lows can be quite dangerous in this arrangement, leading to a significant undervalue – he summed up.

At the time of writing, bitcoin costs over $ 42,000. of dollars, losing about 40% from its all-time high above $ 69,000. drawn in November 2021.

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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