Based on these on-chain support levels, the price of Bitcoin will continue to rise

The price of Bitcoin (BTC) is currently on a high, and according to data on the chain, there is a possibility that the crypto asset could go higher.

According to a report from the same CryptoQuant analyst, Avocado, several on-chain support levels point to a positive inflection point for BTC in the long term, indicating that the cryptocurrency is still in the bull season.

Positive Outlook for Bitcoin

Avocado These data points on the chain have reached their average support level, and combined with recent price movements, these indicators indicate positive sentiment from a long-term perspective.

One of the metrics is the seven-day Simple Moving Average (SMA) of Bitcoin's Fund Flow Ratio, which shows that BTC investors have started trading on the exchange again. The indicator dropped to 0.05, which served as a major support when the ratio stopped declining, and is now recovering slightly.

Avocado retracements historically occur at the end of a bear market or semi-event and the beginning of a bull phase. It usually leads to higher long-term rallies in the price of Bitcoin.

The second metric that is currently showing signs of recovery and has established a critical support range between 0.15 and 0.175 is the 30-day SMA of Bitcoin's estimated leverage.

“I believe the impact of this measure will continue to grow after 2021 with the approval of futures ETFs and recent positive news regarding Bitcoin options trading,” Avocado said.

The analyst highlighted the 30-day Exponential Moving Average (EMA) of Bitcoin's Binary Coin Days Destroyed (CDD), which is currently hovering between 0.1 and 0.3. This indicates that long-term holders are accumulating BTC. According to Avocado, a sharp rise in the price of this metric usually signals the end of a bull market.

Bitcoin increases 7.5% every week

Avocado's analysis comes as BTC recorded a 7.5% gain last week, spurred by the Federal Reserve cutting interest rates by 50 basis points. The Fed's action increased money flows in the US and intensified activity in the Bitcoin futures and perpetual markets, increasing open demand and subsequently increasing the value of the asset.

According to data from CoinMarketCap, BTC was worth $63,500 at the time of writing, a slight increase over the past 24 hours.