Bitcoin Bull Trap Or Bull Run? This Is What Glassnode Says

1 year ago

The Bitcoin terms is up 40% year-to-date (YTD) and has recaptured the $23,000 level. However, with ongoing concerns astir DCG and Grayscale arsenic good arsenic macroeconomic uncertainties, galore investors uncertainty the sustainability of the caller terms rally.

With higher prices, information among investors whitethorn beryllium expanding to usage the existent terms level to exit and summation liquidity, particularly aft the agelong and achy carnivore marketplace successful 2022, arsenic Glassnode discusses successful its report.

The renowned on-chain investigation steadfast examines successful its newest probe whether Bitcoin’s caller bounce supra the terms it has past seen earlier the FTX collapse is simply a bull trap oregon if so a caller bull tally is connected the horizon.

Bitcoin On-Chain-Data Suggests

Glassnode notes successful its report that the caller terms spike successful the $21,000-$23,000 portion has resulted successful the reclamation of respective on-chain terms models, which has historically meant a “psychological displacement successful holder behaviour patterns.”

The institution takes a look astatine the Investor Price and Delta Price, noting that successful the 2018-2019 carnivore market, prices stayed wrong the confines of the Investor-Delta terms set for a akin magnitude of clip (78 days) arsenic they presently bash (76 days).

“This suggests an equivalency successful durational symptom crossed the darkest signifier of some carnivore markets,” Glassnodes states.

In summation to the duration constituent of the bottoming phase, Glassnode besides points to the compression of the capitalist delta terms scope arsenic an indicator of the strength of marketplace undervaluation. “Considering the existent terms and compression value, a akin confirmation awesome volition beryllium triggered erstwhile the marketplace terms reclaims $28.3k.”

Regarding the sustainability of the existent move, the investigation notes that the caller rally has been accompanied by a abrupt summation successful the percent of proviso successful profit, rising from 55% to implicit 67%.

This abrupt summation successful 14 days was 1 of the strongest swings successful profitability compared to erstwhile carnivore markets (+10.6% successful 2015 and 8.3% successful 2019), which is simply a bullish awesome for Bitcoin.

Following past year’s capitulation events, erstwhile a bulk of investors were pushed into a loss, the marketplace has present transitioned to a “regime of nett dominance,” which Glassnode says is “a promising motion of healing aft the beardown deleveraging unit successful the 2nd fractional of 2022.”

Less bullish, however, is the selling unit from Bitcoin short-term holders (STHs), traditionally “an influential origin successful the enactment of section betterment (or correction) pivots.” The caller surge has pushed this metric supra 97.5% successful nett for the archetypal clip since its November 2021 all-time high, massively expanding the likelihood of selling unit from STHs.

Long-term Bitcoin holders (LTHs) person risen backmost supra the outgo ground astatine existent prices aft 6.5 months, which is astatine $22,600. This means that the mean LTH is present conscionable supra its breakeven base. Indeed, the existent inclination indicates that the bottommost could beryllium in:

Considering the clip magnitude of LTH-MVRV traded beneath 1 and the lowest printed value, the ongoing carnivore marketplace has been precise comparable with 2018-2019 truthful far.

Glassnode besides states that the measurement of coins older than 6 months has accrued by 301,000 BTC since the opening of December, proving the spot of the HODLing conviction.

On the different hand, miners person utilized the caller terms spike to boost their equilibrium sheets. Miners person spent astir 5,600 BTC much than they person received since January 8.

In conclusion, the probe steadfast says that it is not yet imaginable to marque a last judgement connected whether the adjacent bull marketplace is imminent oregon whether the bulls are heading into a trap:

[H]igher prices and the lure of gains aft a prolonged carnivore marketplace thin to motivate proviso to go liquid again. […] On the contrary, proviso held by semipermanent holders continues to increase, which tin beryllium taken arsenic a awesome of spot and condemnation […].

At property time, the Bitcoin terms stood astatine $23.085, remaining comparatively calm aft the caller spike.