ARK Invest Identifies Strong Bitcoin Indicators

Analysts at ARK Invest highlight that several on-chain indicators currently point to a healthy Bitcoin (BTC) market.

In a recent report, ARK notes that BTC remains oversold following the German government’s recent liquidation of coins confiscated from an illegal movie streaming site.

David Puell, an analyst at ARK, states that Bitcoin’s sell-side risk ratio for short-term holders (STHs) is now in a “deep value” zone after a multi-month correction. The sell-side risk ratio indicator helps predict if STHs are likely to sell their coins and potentially cause a market correction.

Puell explains, “Another metric in apparent deep value was the sell-side risk ratio of short-term holders, printing values as oversold as in late 2023.”

Additionally, Puell mentions the miner outflow multiple indicator, which tracks periods when BTC outflows from miner addresses are high compared to the historical average. This indicator is currently at a level that has previously been associated with positive market movements.

“The miner outflow multiple, used to gauge miner capitulation in the Bitcoin ecosystem, traded at 80% its yearly average, usually correlated to positive market reversals,” Puell adds.

ARK’s report also suggests that upcoming economic data might compel the Federal Reserve to lower interest rates, potentially boosting Bitcoin despite the Fed’s current hawkish stance.

At the time of writing, Bitcoin is moving hands at $67,709 according to CoinMarketCap data.