Is the bull market dead, or is the pullback over? I use five on-chain signals to judge where we are now.

Question

Every time the market dumps, someone in the group shouts, “The bull market is over—get ready to go to zero”; every time it rebounds, someone else shouts, “The new leg up is here—go all-in.” Emotions keep bouncing between the extremes, and no one can convince the other. The ones most likely to be washed out by this noise are precisely the medium- to long-term holders—they’ve made it through the drawdown, only to fall into panic in the hours before dawn.

Actually, both bull and bear markets have their scripts written on-chain long ago. It’s just that most people only stare at a single red/green candlestick and can’t see the more真实 underlying structure of available supply. Today, I’ll pick five on-chain indicators I use most often to help you “take the market’s temperature.” Stop letting trading-screen emotion drive you, and stop letting extreme comments in the group push you into cutting losses.

I’m used to doing a weekly on-chain check-up every Sunday night, recording the status of the five signals in a small notebook and coloring them red, yellow, and green. After more than two years of sticking to this, the biggest gain wasn’t getting a few calls exactly right—it was that I no longer get yanked around by day-to-day blow-off tops and brutal selloffs. Because I know a single candlestick can’t change the on-chain structure, and it’s that structure that fundamentally determines how light or heavy my position should be. Separating emotion from signals is the core value of this method.

Judging bull or bear is more reliable with “on-chain supply structure” than just looking at price. The first signal is MVRV (market cap / realized cap): below 1 suggests most people are underwater and the market is approaching the cycle bottom. Right now it’s hovering around 1—this is not a crazy top and not a hopeless bottom, but a zone of hesitation. The second is NUPL (unrealized profit/loss ratio): currently it swings within the “anxiety–belief” range, meaning the market is still in a decision period. It’s not greed and not panic at its extreme—this state is the most exhausting.

Third, look at long-term holder supply. It’s rising, which means coins are moving from short-term traders to believers—that’s one of the bottom characteristics, and explains why every major bottom is “retail sells in panic, while giant whales gather.” Retail hands over their coins while anxious; whales consolidate while anxious. This is the fairest market reversal mechanism.

Then I add two more auxiliary signals of my own. One is the ratio of active addresses to new addresses: if active addresses rise but new addresses don’t, it suggests old users are frequently churning and flipping, and the market’s continuity isn’t great. Only when new addresses grow at the same time is fresh money actually entering the market—and that’s healthier. The other is the net inflow structure from exchanges: retail’s small, scattered inflows often come from panic-bottom-picking, while a whale’s full-ticket inflow looks much more like building a position. Overlay these secondary signals on top of the main ones, and your judgment will be more stable and you’ll doubt yourself less.

Fourth, the exchange balance: overall it’s still declining, which suggests that coins are shifting from “sellable” to “long-term holding.” That means reduced selling pressure—a good sign for the supply side, with fewer sell orders. Fifth, the growth rate of stablecoin market value: it hasn’t expanded meaningfully, implying that new money from off-chain is still watching from the sidelines and the demand side hasn’t been ignited yet. This is also why price grinds but doesn’t rise.

Reading the five signals together: we are most likely in the “bottoming grind of the late bear / early bull” zone. Not at the bull market top, and not in the depths of a crash. What the market lacks is confidence and fresh capital—not upside “space.” That’s also why it’s cheap now but no one dares to buy: emotions are still at an extreme low, and that extreme low corresponds to the cheapest coin supply.

About stablecoin market value, I’ll say more: looking only at total market cap isn’t enough—you need to know where it comes from. If it’s newly minted (on-chain direct issuance), that’s real money entering. If it’s old coins moving between exchanges, that’s just moving existing inventory around. I’m watching the activity of USDT on-chain issuance addresses. Recently, it has basically been flat—meaning incremental demand hasn’t kicked in. That’s also why I say we’re grinding the bottom rather than entering the main rally: the supply side is improving, the demand side hasn’t been ignited, and what’s missing is that spark.

The playbook for the bottoming grind is eight words: scale in, left-side, light positions. In the long-term support area (BTC 5.8-6.2 ten thousand, ETH 1600-1700), buy gradually with a DCA mindset. Don’t try to buy the absolute bottom in one shot—there’s only one lowest point, and you almost certainly can’t buy it. But within the cheap range, there’s a whole wide band that you can buy.

Once on-chain shows the three-way resonance—“MVRV turning up + stablecoin market value recovering + exchange balances accelerating downward”—then add more and shift to an offensive posture. Right now, patience matters more than technicals. If you blindly go heavy to bottom-fish, you’ll most likely be catching it in the “mid-slope of the mid-slope,” then get worn down through the grinding bottom until you doubt everything, and only cut losses right before the real turn.

Execution details in the grinding zone: I don’t use one-off DCA. I use the value averaging method—when the market drops more, I buy a bit more; when it drops less, I buy less. This automatically achieves “buying cheaper more and buying higher less.” At the same time, I set a hard ceiling: total position size, up to 50% at most, and I won’t add more beyond that. The rest waits for the converging signals. Many people fire all their bullets in the bottoming grind, and when the real inflection point arrives with volume, they end up with no money left. That’s doing the sequence completely backwards. Rhythm matters more than the exact entry price; keeping funds matters more than bottom-fishing.

On-chain signals are “probability,” not “guarantee.” Extreme macro shocks (war, systemic risk) can break any bottom structure, and indicators can fail—at that point, nothing like MVRV can save you. Also, the bottoming grind may last for months, even longer. Don’t use borrowed short-term funds to “bottom-fish a long-term bottom.” The time cost will crush you; interest will eat away your principal. You can afford to wait for the bottom; you can’t afford the interest.

And don’t go all-in just because “the indicators are all trending.” Even if “after the bottom” it may still grind for a long time, position management is more important than bottom-timing. Keep your bullets so you can wait for the moment of resonance.

One more mindset trap to remind you about: when you watch on-chain signals steadily improve, it’s easy to get excited early and increase your position too soon. But if the bottoming grind drags on for another two months, your cash gets drained by time costs, and in the end you cut losses right before the real start-up. “Signals good” doesn’t mean it will rally immediately—there could still be a final drop in between. So even if everything turns green, don’t max your position. Keep 30% cash—this is both your safety cushion and your confidence backup.

Bull/bear transitions are never decided by a single bullish candlestick; they result from a set of signals gradually converging into resonance. Learn to read on-chain, and you’ll have a “map to traverse emotions.” You won’t be terrified by a single “go to zero” line in the group, and you won’t be carried away by a single “main rally” sentence—you’ll have your own thermometer.

When the market is darkest, it’s often when the coins are cheapest—provided you’re still at the table, and you still have bullets. Otherwise, even if it’s cheap, it’s unrelated to you.

The biggest meaning of on-chain data is giving you a map to traverse emotions. With that map, when there are mass “go to zero” claims in the group, you can roughly tell where you are. And when everyone is yelling “main rally,” you can remind yourself whether you’re already in the zone where you should reduce exposure. Tools can’t guarantee you bought the absolute bottom, but they guarantee you won’t make the dumbest decision. And in the market, not making dumb moves already means you’ve beaten most people.

Are you now in a bear market, a bull market, or a bottoming grind? Use one indicator you use most and tell us why. In the comments section, we’ll match notes and compare everyone’s “thermometers,” and see exactly how deep the market’s panic really is.

$BTC$ETH

BTC-1.85%

ETH-1.56%

View Original

Is the bull market dead, or is the pullback over? I use five on-chain signals to judge where we are now.

Trending Topics

USD1StakingEarnUpTo8%APR

GateCardUpTo8%Cashback

CXMTDrops7.7%AtOpen

MinnesotaPredictionMarketBanBlocked

BitmineHolds5.78METH

Pinned