The current week is developing negatively both for bitcoin and for the entire cryptocurrency market. Over the past day, the main cryptocurrency declined by 3% and it collapsed past the level of $40,000 for the first time since August, which is an alarming sign for the market. The technical indicators of the cryptocurrency are becoming more and more clearly bearish, which promises a breakdown of $42,00 and a further downward movement. At the same time, the analysis of on-chain metrics gives a contradictory, but at the same time, encouraging picture of what is happening.

On-chain activity is the actions of cryptocurrency market players who independently manage their crypto assets, which is why the record goes directly to the main blockchain. This statistic includes both private investors and large companies.

The MVRV (Market Value to Realized Value) indicator is an indicator that displays the ratio of the market and realized the value of a particular cryptocurrency. This metric gives a more objective idea of the current value of the coin. The indicator evaluates the current position of investments of market players: if the market value of the coin is higher than the realized value (the value is above 0), then this indicates that investors have made a profit. If the ratio is approximately equal, then the players are in the minimum plus or even suffer losses.

Despite Bitcoin's two consecutive strong declines, the metric of realized and market value looks very optimistic. The indicator has dropped to 14%, but this is still an extremely high indicator for the current market position. Moreover, the MVRV chart shows an upward trend, which indicates an increase in investor profits. It is also worth noting the potential formation of the "Head and Shoulders" figure on the 30-day chart of the ratio of realized and market value. However, in order to draw certain conclusions, it is necessary to wait for the final formation of the figure and the breakdown of the "neck" line. If the figure is not formed, then we can safely talk about the continuation of the upward trend. In the case of the formation of the "head and shoulders", we can consider a change in the direction of the trend to a downward one.

The "Head and shoulders" figure is a chart that signals a possible trend reversal. It consists of three peaks, where the middle (head) is the highest, and the two side peaks are at about the same level.

Analyzing the on-chain indicator of network activity, a decreasing divergence between the number of unique addresses and the market value can be noticed. This eliminates the possibility of the formation of local bubbles in the bitcoin market and also contributes to the creation of strong support and resistance lines. If the trend towards an increase in the divergence between the price and the metric decreases in the future, we can count on a smooth and more predictable growth of Bitcoin. In addition, there is a tendency to increase network activity and the number of unique addresses in the BTC network, which is also a positive sign and indicates that the price will further grow in the near future.

Another important indicator that is able to display Bitcoin's state, and the probability of continuing the bull market, is the SSR metric. Recently, this indicator fell to a historical low, followed by a phase of significant growth. As of September 22, the indicator is also at a record low level, which may become a prerequisite for a further increase in the price of bitcoin. In general, all the main very-metrics indicate a resumption of the bullish trend in the bitcoin market, and so, it worth counting on price stabilization and the start of the purchase period and price growth.

Defining terms:

The SSR indicator is the ratio of the supply of stablecoins and bitcoins. Traders often use stables to buy BTC. Low indicators of this indicator indicate a high purchasing power of stablecoins relative to bitcoins.

Stablecoins are a generalized name for cryptocurrencies that are backed by physical goods or instruments (gold, oil). They are characterized by less volatility and fluctuations compared to classic cryptocurrencies.