Bitcoin On-Chain Signal of Early Stage Bull Markets Now Showing Up, Says Analytics Firm Glassnode

Analytics firm Glassnode says that an on-chain metric for Bitcoin (BTC) that has historically signaled the early stages of a bull market is showing up on the radar.

According to Glassnode, Bitcoin’s long-term holder MVRV (LTH-MVRV), which tracks the behavior of long-term BTC investors, has entered “high-risk” territory.

The analytics firm shares a chart that suggests BTC tends to witness a significant market expansion when the LTH-MVRV signal hovers above the high-risk area.

“After the challenging recovery since the FTX collapse, this indicator has advanced to 2.06, entering the high-risk regime.

These levels are typically seen during the early stages of bull markets, as long-term investors return to a relatively meaningful level of profitability.”

Glassnode also looks at its Percent of Supply in Profit (PSIP) metric, which measures the proportion of coins with a cost-basis lower than the current spot price. According to the firm, the metric suggests that BTC is perhaps a few thousand dollars away from putting Bitcoin into a “euphoric phase” of the bull market.

“When this indicator trades above the upper band, it has historically aligned with the market entering the ‘Euphoric Phase’ of a bull market. During the recent market rally around the spot ETF (exchange-traded fund) launch, this metric reached the very high risk, which was followed by a contraction down to $38,000.”

At time of writing, Bitcoin is trading at $48,302.

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