A leading analyst at Glassnode, a prominent cryptocurrency analytics firm, suggests that Bitcoin is poised for its next upward movement.

Known by the pseudonym Checkmate, Glassnode’s chief on-chain analyst, shared insights on social media platform X (formerly known as Twitter) into the Profit/Loss Momentum for short-term Bitcoin holders. According to Checkmate, this indicator has recently moved back into positive territory, making it one of the most sensitive on-chain trend metrics available.

The analyst noted that the bears had previously driven this indicator into the negative during a market downturn, where Bitcoin’s price dropped from $29,000 to $26,000. Despite this negative shift, the bears were unable to push the indicator further down. This occurred even as the market experienced significant losses, marking the most bearish phase since the time of FTX.

Checkmate offered two possible explanations for the indicator’s shift back into the green. The first is that this could be the last round of profit-taking before a more severe market downturn. The second interpretation is that this positive shift could signify a resurgence of market strength.

Interestingly, Checkmate leans more towards the second interpretation. He pointed out that Bitcoin has been showing resilience amidst a volatile macroeconomic environment, which makes him more optimistic about the cryptocurrency’s near-term prospects.

In a separate post on the same day, Checkmate shared additional insights, asserting that Bitcoin is currently in what he terms a “value zone.” According to him, the cryptocurrency is trading below its true market cost basis, which he identifies as $29,700.

Checkmate also referenced the AVIV Ratio, describing it as the most precise gauge of the market’s central point. He noted that this ratio is currently 0.6 standard deviations below its long-term average. This suggests that, based on this metric, Bitcoin is undervalued at present.

While Checkmate did not make specific short-term predictions, he emphasized that, from the perspective of value investors, the current bearish sentiment is misplaced. He suggests that at these trading prices, the bears are incorrect in their market assessment.

At the time of writing (5:33 p.m. UTC on 10 October 2023), Bitcoin is trading at around $27,372, down 0.94% in the past 24-hour period.

Featured Image via Midjourney