Key Takeaways:
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The Macro Chain Index has issued its first buy signal since 2022, suggesting a potential new Bitcoin bull run.
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An RSI crossover on the MCI correlates with previous cycle bottoms that led to significant BTC rallies exceeding 500%.
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The Bitcoin price has bounced back from $74K to $95K, backed by increasing open interest and favorable funding rates.
Recently, a vital Bitcoin (BTC) indicator, the Macro Chain Index (MCI), has flashed a new buy signal, indicating that the cryptocurrency may be on the cusp of a new bull phase. This development comes as market insight indicates a promising turnaround from the 2022 lows.
Identifying Potential Market Bottoms with the Macro Chain Index
The Macro Chain Index, a comprehensive measure of various long-term on-chain and macroeconomic metrics, plays a pivotal role in determining Bitcoin’s valuation. By analyzing accumulation behavior, network activity, and supply trends, the MCI can provide insights into whether Bitcoin is currently undervalued or overvalued based on historical cycle positioning.
One critical aspect of the current MCI chart is the RSI (Relative Strength Index). In April, the RSI crossed above its 52-week moving average, a signal that has historically confirmed the initiation of Bitcoin bull runs.
This RSI crossover is reminiscent of previous instances, notably in 2015 before reaching $20,000, 2019 just ahead of the climb to $65,000, and late 2022 right before BTC set its bottom around $15,500. Should these historical patterns recur, the April 2025 crossover could signal the onset of another bull run, especially with other indicators pointing toward Bitcoin possibly exceeding the significant psychological barrier of $100,000.
According to Alpha Extract, the MCI’s creator, “Our Macro Chain Index fired a long signal, the first buy signal since 2022, when it successfully went long at the absolute bottom. Considering that the fundamentals align and the market structure is gradually following, this is a significant call, in my opinion.”
Market Momentum Strengthens with Increasing Open Interest
Bitcoin’s recent price surge is further bolstered by significant activity in futures markets, particularly on Binance. In the first quarter of the year, Bitcoin’s open interest (OI) saw a sharp decline from $11.9 billion to $7.5 billion, reflecting diminished confidence during market downturns. However, the trend reversed in mid-April, with OI rising 29.3% to reach $9.7 billion, aligning seamlessly with Bitcoin’s price recovery.
This harmonious rise in price and open interest signals that traders are entering new long positions rather than merely closing shorts, suggesting a renewed confidence in Bitcoin’s upside trajectory. Furthermore, the persistence of positive funding rates indicates that long-position holders are paying short sellers, a classic sign that the market anticipates price increases.
The combination of rising open interest and positive funding rates reinforces the argument that Bitcoin may continue its ascent toward the elusive $100,000 mark in the near future.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
