No, a price drop of 20% is usually a normal correction, not the end of a bull market.

Instead of panicking while looking at the chart, it's worth taking a cool look at the on-chain data, which reflects actual actions in the Bitcoin network.

This data, such as the flows of bitcoins to and from exchanges, or the average purchase prices of BTC, helps maintain calm and stick to the plan.

They show that current declines are often an opportunity for accumulation for 'strong hands', not a signal to flee.

Especially if you think long-term.

What is on-chain analysis and why does it provide calm?

On-chain analysis is looking "under the hood" of Bitcoin.

Instead of reacting to a red candle on the chart, we check the actual actions of investors.

It's like an X-ray that shows whether a bone is broken or just bruised.

When the price drops, but data shows that BTC is still being massively withdrawn from exchanges, it has always been a bullish signal.

It means that new buyers (e.g., ETF funds) or old investors or big players are buying this dip and transferring coins to private wallets.

And when someone withdraws purchased Bitcoin from an exchange, do you think they want to hold it or sell it in 5 minutes?

Interestingly, whenever the bull market ended, inflows to exchanges increased, which is almost logical.

Today, for now, Bitcoins are leaving exchanges and in very large quantities.

Two simple on-chain indicators for beginners.

You don't need complicated tools.

Focus on two things.

The first is exchange netflows.

Google it, search and you will find it for free.

When the bars are red, more BTC leaves exchanges than comes in.

It is a signal of accumulation. And this is a trend we have been observing for months.

The second is average purchase prices (Realized Price) of different groups, e.g., holding BTC from 6 to 12 months.

Historically, Bitcoin likes to "test" these levels during corrections.

For me, it is often a signal for further purchases, not a reason to panic.

How do on-chain data indicate the end of a bull market?

Historical data, e.g., from the cycle in 2017, shows a clear pattern before the bubble burst.

A massive inflow of Bitcoins to exchanges is starting (green bars).

Old "whales" are starting to sell to those who are buying in euphoria.

Currently, we do not see this.

The outflow trend continues.

As long as "old" players do not start massively moving coins to exchanges to sell them, it is hard to talk about a highly probable end of the cycle.

Why do I write about probability and not certainty?

Because something like certainty in investments does not exist.

Tomorrow Trump or the head of the FED might say something that will turn this market upside down.

However, in the short term.

In the long term, certain patterns repeat.

Key Takeaways:

  • 1. Price is noise, on-chain is signal: Price reacts to emotions, on-chain data shows actual capital flows.

  • 2. Outflows from exchanges = Accumulation: As long as BTC leaves exchanges to private wallets, it is a good sign.

  • 3. A drop to average purchase prices is normal: This is not the end of the world, but often a planned opportunity for accumulation.

I am still buying at the lows with the thought of accumulating BTC for the next 5-10 years and more.

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