Bitcoin on-chain signals for early-stage bull markets are now emerging, according to analytics firm Glassnode
Analytics firm Glassnode says an on-chain metric for Bitcoin (BTC) that has historically signaled the early stages of a bull market is coming onto the radar.
According to Glassnode, Bitcoin 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 experience significant market expansion when the LTH MVRV signal hovers above the high-risk zone.
“After the challenging recovery since the FTX collapse, this indicator has risen to 2.06, putting it in the high-risk zone.
These levels are typically observed in the early stages of bull markets when long-term investors return to relatively significant levels of profitability.”
Source: Glassnode/X
Glassnode also looks at its Percent of Supply in Profit (PSIP) metric, which measures the proportion of coins whose cost basis is below the current spot price. According to the company, the metric suggests that BTC is perhaps still a few thousand dollars away from putting Bitcoin into a “euphoric phase” of the bull market.
“Historically, when this indicator trades above the upper band, it corresponds to the market entering the 'euphoric phase' of a bull market. During the recent market rally surrounding the spot ETF (Exchange Traded Fund) launch, this metric reached very high risk, which was followed by a decline to $38,000.”
Source: Glassnode
At the time of writing, Bitcoin is trading at $48,302.
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