It would be fair to say that sentiment has shifted for all financial markets across the globe recently. Bitcoin has been no exception to this trend, and on-chain metrics may indicate where markets could be heading next.

Blockchain data and intelligence provider Glassnode has been delving into the charts and some on-chain metrics for Bitcoin to ascertain what has been happening to sentiment since the big price dump early last month.

Since its 50% crash four weeks ago, BTC has managed to recover half of that, back to top $7,000 during late trading yesterday. Where it is heading next is the big question in the crypto-sphere at the moment, especially with the halving just 40 days away.

Has Bitcoin Bottomed?

The research firm suggested that most on-chain metrics have bounced out of zones that have historically signaled a market bottom.

This is depicted in the first chart, which shows the most recent market bottom, from November 2019 to early January 2020, as being in the high $6k zone. Bitcoin has now returned to this area, which could signal an accumulation phase.

The second chart shows the percent of UTXOs (unspent transaction outputs) in profit. This also appears to have hit a bottom of 70% in early March and is now heading back upwards. The percent of supply in profit mirrors the UTXO chart with a rebound as the Bitcoin price has recovered over the past couple of weeks.

Other Metrics Turning Bullish

Chart No. 4 four shows the Puell Multiple, which is calculated by dividing the daily issuance value of Bitcoins in USD by the 365-day moving average of this value. It has dropped significantly below the price level, indicating that Bitcoin has been overvalued and has returned to undervalued levels. This could signify a sentiment shift and a return for the bulls.

The MVRV ratio was created by Murad Mahmudov and David Puell as a way to compare realized value and market value by dividing one into the other. This chart shows that the ratio dipped below zero into the ‘green zone,’ indicating that the previous dip was a bottom and prices are recovering.

The Reserve Risk metric in the final chart provides a visualization of confidence among long-term Bitcoin holders relative to the price of the asset at a given moment in time. It too bounced into a buying zone when BTC prices collapsed and is now back on the way up.

There are many on-chain metrics that can be used to determine market sentiment for Bitcoin, and these six at least all signal that the bottom has been hit and prices are slowly grinding higher once again.