Bitcoin Indicator Just Turned Positive: Could It Indicate Another Bull Market?

A lesser-known but historically accurate Bitcoin BTC/USD price indicator has turned positive, signaling the potential start of a significant bull market.

For the first time since October 2021, Bitcoin's reserve risk multiple has crossed above zero, as reported by blockchain analytics firm Glassnode.

Past instances of the reserve risk multiple crossing above zero have led to impressive price surges.

On-chain analyst Ali Martinez tweeted Monday, "In 2012, 2013, 2015, 2019, and 2020, it resulted in gains of 2,830%, 566%, 6,400%, 99%, and 487%, respectively."

This #Bitcoin indicator signals huge potential!

When the $BTC Reserve Risk moves above 0, it signals parabolic price moves. In 2012, 2013, 2015, 2019, and 2020, it resulted in gains of 2,830%, 566%, 6,400%, 99%, and 487%, respectively.

Reserve Risk just crossed 0 again!👀🙀 pic.twitter.com/NQI39IKUI8

— Ali (@ali_charts) April 17, 2023

Glassnode describes reserve risk as a long-term cyclical indicator that compares the incentive to sell at the current market price to long-term holders' resistance to liquidating.

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A lower reading suggests strong conviction among HODLers — slang for long-term crypto investors — and the opposite for higher readings. 

The reserve risk multiple is determined by dividing the daily indicator value by its 365-day moving average.

Historically, the reserve risk multiple's crossovers above and below zero have accurately predicted major bullish and bearish trends.

If this pattern holds true, the cryptocurrency's 80% year-to-date rally to 10-month highs above $30,000 might be just the beginning of its upward trajectory.

This bullish outlook aligns with Bitcoin's tendency to experience substantial rallies in the months leading up to the mining reward halving, a programmed code that cuts the cryptocurrency's supply expansion rate by 50% every four years. The fourth Bitcoin reward halving is scheduled for April next year.

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