Bitcoin (BTC) Market Reflecting Positive Health as Several On-Chain Indicators Flash Oversold Conditions: ARK Invest

Analysts at ARK Invest say that several on-chain indicators are currently reflecting positive market health for Bitcoin (BTC).

Bitcoin (BTC) Sell-Side Risk Ratio, Miner Outflow Multiple Hint at Positive Market Health

Several on-chain indicators are currently reflecting positive market health for Bitcoin (BTC), according to analysts at ARK Invest.

In a new report, ARK highlights that BTC is still being oversold after the German government sold off coins earlier this month that were confiscated from an illegal movie streaming website.

Now, BTC is preparing for another round of large-scale selling by a government agency. This time, the government of Taiwan will be auctioning off 164 BTC on March 8th. The coins were seized by the Criminal Investigation Bureau in 2023.

However, on-chain metrics are suggesting that the selling by government agencies may be nearing its end. According to ARK analyst David Puell, Bitcoin’s sell-side risk ratio for short-term holders (STHs) is now in a “deep value” zone following the multi-month correction.

The short-term holder sell-side risk ratio indicator aims to predict whether STHs are about to unload their coins and potentially trigger a correction.

Says Puell,

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

Puell also highlights the miner outflow multiple indicator, which records periods where the amount of BTC flowing out of miner addresses is high relative to its historical average.

The indicator is currently at a level that has previously correlated with positive market moves.

“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.”

According to Puell, ARK believes that incoming economic data will likely force the Federal Reserve to cut interest rates and help boost Bitcoin, contrary to the Fed’s current hawkish sentiment.

At the time of writing, Bitcoin is trading at $67,383.

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