Bitcoin (BTC) sits at a key decision point as an on-chain metric signals early bull market conditions.

Bitcoin faced a slight setback after briefly touching $97,000, with prices dipping to just under the $94,000 mark. This move reflects a 3-4% retracement from the recent peak. However, analysts suggest deeper on-chain indicators are beginning to paint a more pivotal picture of market direction.

While the 7-day and 24-hour returns indicate marginal declines of -0.1% and -1.0% respectively, the longer-term data remains strong, boasting gains of 8.0% over the past 14 days and 13.3% over the past 30 days.

Composite Index Signals Early Bull Market Phase

This performance analysis pivots attention to the Bitcoin Composite Index v2.0, a tool that fuses on-chain and price-based indicators to gauge market sentiment.

According to analyst Constantin Kogan, the current reading of 0.8 on the index mirrors historical conditions seen at the beginning of past bull runs. When this threshold has been breached and sustained, it has often preceded significant upward price moves.

The upward momentum in Bitcoin is just starting to build, with on-chain metrics like the Bitcoin Composite Index signaling the beginning of a bull market. The index has already reached 0.8 (80%). Here are three possible scenarios:

Bullish: BTC could surge to… pic.twitter.com/8bZ4vmr2CH

— Constantin Kogan (@constkogan) May 4, 2025

Notably, the “Running ATH Price” line within the index has started to trend upward, indicating rising investor confidence. The index approaching the critical 1.0 level could mark a transition toward stronger bullish momentum.

If Bitcoin sustains above this zone, historical data suggests it could enter a rally phase similar to the parabolic rises in 2017 and 2021.

Under such a scenario, the analyst indicates a potential price target range of $150,000 to $175,000. However, if the index remains between 0.8 and 1.0, Bitcoin may instead enter a consolidation phase between $90,000 and $110,000.

Meanwhile, a drop below 0.75 could lead to a correction toward the $70,000 to $85,000 range, though this is the least probable scenario.

UTXO Data Reveals Crucial Supply Pressure Zone

Another analytical layer emerges through the UTXO Realized Price Distribution (URPD) chart, shared by analyst Checkmate. This tool maps Bitcoin’s supply against the prices at which it was acquired.

The chart’s histogram shows where BTC was last moved, reflecting investors’ cost bases. The most notable feature is the concentration of supply at significantly lower acquisition prices, reflecting long-term holders who are deep in profit and likely not selling, contributing to the ongoing supply constraints.

A zone of interest lies between $93,000 and $98,000, where investors acquired a substantial amount of BTC. With Bitcoin trading near $94,000, the market appears to be at a decision point.

According to the analyst, a strong breakout—marked by a decisive candle—could confirm bullish continuation by flipping recent supply into profit and fueling upward momentum. Conversely, a rejection at these levels may signal a lower high formation, increasing the likelihood of a deeper correction as selling pressure builds.