On-Chain Analysis as a Market Indicator
Cryptocurrency analyst Joao Wedson has evaluated Bitcoin's current outlook through on-chain data, explaining that the market is currently at a critical threshold. Wedson argued that on-chain analysis is one of the crypto market's most powerful tools, providing a real-time view of underlying price structure. This data, he said, offers deep insight beyond price action, particularly because it reflects the behavior of long-term investors.
The CVDD Channel: A Key Metric
The most important indicator Wedson highlighted was the CVDD (Cumulative Value Days Destroyed) Channel. This metric reveals the most critical dynamic support and resistance zones in Bitcoin and is based entirely on real investor behavior. According to the analyst, the CVDD Channel is one of the clearest directional indicators in the market because it is based on concrete data, specifically focusing on the movements of legacy coins, rather than on speculation or sentiment.
Historical Parallels and Current Levels
The analyst noted that Bitcoin's current level corresponds to the same on-chain support zone as the momentum loss zone where the price struggled to hold around $29,000-$30,000 during May 2022. BTC failed to maintain this level at that time and subsequently experienced a much steeper decline. Wedson stated that this similarity makes the current price zone an area to “watch carefully.”
Crucial Support Level and Potential Downside Scenarios
According to Wedson, the market must currently defend the $88,000 level. Bitcoin's ability to hold above this level is crucial to rule out a deeper downside scenario. However, as long as the price remains below this level, there is the potential for selling pressure, particularly from Long-Term Investors (LTH). Due to the sensitivity of the CVDD indicator to the movements of very old coins, the indicator could deteriorate rapidly if this group of investors resorts to selling.
If BTC fails to stay above $88,000, natural target areas indicated by the CVDD Channel are $76,800 and, in a more pressured scenario, $71,250. Wedson argues that these levels have historically been “post-capitulation market revaluation points,” and that these are the areas where bottoms have often formed in past cycles.
CVDD as a Bottom-Spotting Indicator
Wedson also claimed that the CVDD indicator has been the most accurate bottom-spotting indicator throughout Bitcoin's cycle. The indicator's current base value is $47,450, and this value continues to be updated daily. The analyst concluded his assessment by stating that the key question in the current cycle is whether this base level will also serve as the ultimate bottom in a potential 2026 bear market.