Analytics firm Glassnode says the phase of Bitcoin euphoria is still early – here’s why

The blockchain analytics firm says Bitcoin (BTC) is still in a “euphoria phase” despite the recent correction based on on-chain metrics.

In a new report, the company says BTC's current downtrend is still small compared to previous cycles, suggesting the crypto king is in the early stages of a bull run.

“If we go back to the magnitude of the declines that we alluded to earlier, we can see that despite the extensive profit-taking by existing holders, the magnitude of the declines remains historically small.

If we compare the ATH (all-time high) breakout in previous cycles, one could argue that the current euphoria phase (price discovery market) is still relatively young. Previous phases of euphoria have seen numerous price declines of more than -10%, although the majority were much deeper and 25%+ were commonplace.

The current market has only seen two corrections of over 10% since breaking the ATH.”

Source: Glassnode/X

According to an on-chain analysis of the industry's largest exchanges, Bitcoin's strength over the past year is largely due to inflows from the spot market, says Glassnode. The company also says that BTC’s short-term correction is supported by “new demand” from new market participants.

“Bitcoin’s strong market performance over the past 12 months is supported by a notable increase in both spot trading volumes and on-chain flows associated with exchanges. By analyzing the cumulative volume delta, we can also estimate that the demand side was remarkably strong, although bids patiently went to the producer side rather than the buyer side.

With the market now above the 2021 ATH, profit-taking has increased but has been easing in recent weeks. The wealth balance is roughly balanced between long-term owners and new demand, suggesting that the “euphoria” phase is still relatively early from a historical perspective.”

Don't miss a thing – Subscribe to receive email alerts straight to your inbox

Check price action

Follow us on Twitter, Facebook and Telegram

Surf the Daily Hodl Mix

&nbsp

Disclaimer: Opinions expressed on The Daily Hodl do not constitute investment advice. Investors should conduct their due diligence before making any risky investments in Bitcoin, cryptocurrencies or digital assets. Please note that your transfers and transactions are at your own risk and any losses you incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl is involved in affiliate marketing.

Generated image: DALLE3

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers