Popular cryptocurrency analytics firm Glassnode has pointed out that an on-chain metric for Bitcoin (BTC), historically indicative of the early stages of a bull market, has appeared on the radar. According to Glassnode, the long-term holder MVRV (LTH-MVRV), which tracks the behavior of long-term BTC investors, has entered a high-risk zone.
Critical Data in Bitcoin
The crypto analytics firm shares a chart showing that while the LTH-MVRV signal is above the high-risk area, Bitcoin tends to witness significant market expansion. The analytics company stated the following:
After the challenging recovery since the FTX collapse, this indicator rose to 2.06 and entered the high-risk regime. These levels are typically seen in the early stages of bull markets, as long-term investors return to a relatively significant level of profitability.
Glassnode is also looking at the Profit Supply Percentage (PSIP) metric, which measures the ratio of cryptocurrencies with a cost basis lower than the current spot price. According to the firm, the measurement indicates that BTC may be just a few thousand dollars away from entering the exuberant phase of a bull market. The firm commented on the matter:
When this indicator trades above the upper band, it historically aligns with the market entering the ‘Enthusiasm Phase’ of a bull market. During the last market rally surrounding the launch of a spot ETF (exchange-traded fund), this measure reached very high risk and was followed by a contraction down to $38,000.
Report from Glassnode
In conclusion, according to Glassnode’s report, an on-chain metric indicating the early stages of a bull market for Bitcoin has been observed, and at the same time, the LTH-MVRV indicator tracking the behavior of Bitcoin’s long-term investors has entered a high-risk zone. This presents a picture that points to a market expansion for Bitcoin, while the Profit Supply Percentage (PSIP) metric also suggests the likelihood of Bitcoin entering the exuberant phase of a bull market.
