The price of Bitcoin dropped slightly after reaching a new peak above $97,000 on May 2. It then fell to just below $94,000, down between 3% and 4% from its recent high. Although short-term price movements keep traders worried, long-term on-chain data has begun to show indicators that may affect what happens next.
The indicator reading suggests an early upward movement in the Bitcoin market.
One indicator, known as the Composite Bitcoin Index version 2.0, stands at 0.8. The index combines price movement with blockchain activity and attempts to assess the potential direction of Bitcoin's price. Analyst Konstantin Kogan sees that a reading at this scale has appeared previously before some significant price increases, as happened in 2017 and 2021.
Kogan described that if this number rises to 1.0 and stabilizes, the price of Bitcoin may start to accelerate significantly. The indicator has not reached this stage yet, but it is moving in the right direction. One of the key components of the indicator, which is the 'all-time high price', has also started to rise. This indicates that more buyers are entering the market, and the potential for increased confidence.