On-Chain Metrics and Bitcoin's Next Phase: What Are the Real Variables?

⚠️ Not financial advice. Crypto involves risk. Always do your own research before investing.

Over the past 24 hours, Bitcoin long positions worth $4,287,193 were liquidated. This isn't just a number. Without realizing it, you could be liquidated after a 23% drop in your Bitcoin long position, just like someone who, after a 12.5% gain on an altcoin on Upbit in October 2023, entered a BTC long the next day. Ignoring on-chain metrics makes you vulnerable to such traps. Don't make hasty investment decisions without reading this article to the end. I'll show you how to protect your investments by leveraging on-chain metrics.

Here's a fact most investors don't know: Bitcoin's price doesn't just react to news or tweets. The vast amount of transaction data recorded on the blockchain—on-chain metrics—provides far more crucial clues. If you can't read these clues properly, you might miss major market trends and incur losses. So, why is Bitcoin investing so challenging? Don't worry! You'll gain insights to predict Bitcoin's next phase using on-chain metrics and develop smart investment strategies.

Bitcoin to Surpass $150,000 by End of 2026

I predict that Bitcoin will surpass $150,000 by the end of 2026. On-chain metrics clearly show strong accumulation by long-term investors and a decrease in liquidity supply. This pattern is strikingly similar to those observed just before previous bull markets. Let's explore the evidence one by one.

Evidence 1: Accumulation Strength of Long-Term Holders (HODLers)

Here's the real deal:

The movements of long-term holders in the Bitcoin market are incredibly important. They tend to steadily accumulate BTC without being swayed by short-term price fluctuations. According to Glassnode data, the percentage of wallets holding Bitcoin for over a year has been consistently increasing, nearing all-time highs. Notably, this percentage rose even more sharply from the second half of 2023 to early 2024. This is a strong signal that long-term investors view current price levels as attractive and are actively buying. Historically, such accumulation by long-term holders has formed a solid foundation for subsequent bull markets. The key here is that when they hold BTC in their wallets instead of selling, it means the amount of Bitcoin circulating in the market decreases. What happens to the price when supply shrinks? Yes, it naturally faces upward pressure. Keep this in mind.

Evidence 2: Continuous Decrease in Exchange Bitcoin Reserves

The amount of Bitcoin held on exchanges is a crucial indicator of market selling pressure. A high amount of BTC on exchanges means it can be sold into the market at any time. Conversely, a decrease in exchange Bitcoin reserves indicates that investors are moving BTC to personal wallets, intending to hold it for the long term. Data from CryptoQuant shows that the Bitcoin reserves of major exchanges have been steadily declining since 2020. This trend has become even more pronounced in 2024, suggesting that the supply of sellable Bitcoin is significantly decreasing, coinciding with institutional ETF inflows. To use an analogy: there are fewer goods in the market, but more people want to buy them. This situation inevitably has a positive impact on prices.

Evidence 3: MVRV Z-Score Signaling Early Bull Market

But wait, there's more:

The MVRV Z-Score is an on-chain metric used to assess whether Bitcoin is overvalued or undervalued by comparing its Market Value to its Realized Value. When this indicator is in the green zone, it suggests undervaluation; in the red zone, overvaluation. Currently, the MVRV Z-Score is at the boundary between green and yellow, indicating the early stages of a bull market. Historically, this indicator always started rising from low levels at the beginning of a bull run. This is strong evidence that Bitcoin is not yet overheated and has significant room for further upside. The crucial point is that the uptrend is likely to continue until this indicator rapidly enters the red zone.

Counter-Scenario Review: What if the Prediction is Wrong?

Of course, all predictions come with uncertainties. We can certainly consider scenarios that contradict my prediction. For example, a sharp deterioration in the macroeconomic environment, unexpected regulatory tightening, or a severe technical issue within the Bitcoin network itself could occur. Specifically, delays in interest rate cuts by the U.S. Federal Reserve (Fed) or a global economic recession could dampen investor sentiment and negatively impact the Bitcoin market. Furthermore, large-scale selling by major Bitcoin mining companies or a sudden exodus of institutional investors through Bitcoin ETFs could also trigger short-term declines. Indeed, according to CoinDesk's analysis, the upcoming U.S. election results could significantly alter the cryptocurrency regulatory landscape. These external variables are difficult to predict solely with on-chain metrics.

Why My Prediction Remains Valid, Nonetheless

Here's the core:

Despite these counter-scenarios, I believe my prediction remains valid because the aforementioned opposing scenarios are unlikely to overturn Bitcoin's fundamental value and the strong accumulation trend observed on-chain. Even if macroeconomic conditions are unfavorable, Bitcoin can act as a safe-haven asset, recognized for its value as an inflation hedge. Moreover, while regulatory tightening might cause short-term market shocks, it could also enhance market transparency and credibility in the long run, attracting more institutional and retail investors. Bitcoin has already proven its value through its globally distributed network. Although technical issues are possible, the Bitcoin core developer community has overcome numerous threats, maintaining network stability. Ultimately, the unwavering trust of long-term holders shown by on-chain metrics and the inherent characteristic of limited supply will serve as a strong foundation to absorb short-term external shocks and regain upward momentum. The truly important point is that positive signals from on-chain metrics will become even stronger when supply scarcity is maximized, coinciding with Bitcoin's halving cycles.

Stop-Loss Conditions: When Should I Retract My Prediction?

There are several conditions under which I would consider my prediction to be wrong and consider a stop-loss.

Hold on, one more thing:

1. Detection of large-scale selling by long-term holders: If a large volume of Bitcoin held for over a year suddenly flows into exchanges, or if wallets with high unrealized gains continuously sell, it could signal a loss of confidence among long-term investors.
2. Rapid increase in exchange Bitcoin reserves: This can be interpreted as an increase in selling pressure.
3. Prolonged stagnation or sharp drop in MVRV Z-Score: Caution is advised if the MVRV Z-Score fails to move out of the undervalued zone for an extended period, or if it rapidly enters the overheated zone and then sharply drops faster than expected.

If these indicators appear in combination, clearly signaling a bearish shift in market structure, it would be wise to re-evaluate my prediction and consider a stop-loss.

My prediction that Bitcoin will surpass $150,000 by the end of 2026 is based on strong accumulation by long-term holders, decreasing exchange liquidity, and the MVRV Z-Score signaling an early bull market. The tracking indicators to confirm the validity of this prediction are as follows:

• First, the continued increase in the supply of Bitcoin held for over one year.
• Second, the ongoing trend of decreasing Bitcoin reserves on major exchanges.
• Third, whether the MVRV Z-Score stably rises within the early bull market zone.

Keep an eye on these indicators to track Bitcoin's next phase with me.

Frequently Asked Questions (FAQ)

Q1: How accurate are on-chain metrics for predicting Bitcoin prices?

On-chain metrics are very useful for price prediction because they reflect real market activity, but external factors must also be considered. They have historically predicted bull and bear market turning points with reasonable accuracy.

Q2: Why is the accumulation of long-term holders (HODLers) important?

Long-term holders are less sensitive to market fluctuations and are committed to holding Bitcoin for extended periods. Their accumulation reduces the circulating supply in the market, which is a crucial factor in increasing upward price pressure.

Q3: What should I do if the MVRV Z-Score enters the red zone?

If the MVRV Z-Score enters the red zone, it signals that Bitcoin is likely overvalued. At this point, a cautious approach is needed, and you might consider selling or adjusting your portfolio.

Q4: How do Bitcoin ETF inflows affect on-chain metrics?

Bitcoin ETF inflows tend to involve large withdrawals of Bitcoin from exchanges to institutional wallets, contributing to a decrease in exchange reserves and can be interpreted as a long-term accumulation signal.

Q5: What else should I look at for Bitcoin investment besides on-chain metrics?

In addition to on-chain metrics, it's helpful to consider macroeconomic indicators (interest rates, inflation, etc.), technical analysis, and major regulatory trends for a balanced investment decision.

About the Author
Education Manager — Senior Crypto Analyst

Expertise: Cryptocurrency Trading, Risk Management, Bitcoin Technical Analysis
Last Reviewed: 2026-06-04

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