Bitcoin Enters a Bull Market Euphoria Zone: Glassnode Report
Bitcoin (BTC) is currently experiencing a surge in the market that resembles previous strong price runs, according to a report by on-chain analysts at Glassnode. The report suggests that Bitcoin is re-entering a bull market “euphoria” zone. Here are the key points:
- The metric known as “realized cap,” which represents the total value of all bitcoins based on their last transaction price, has reached an all-time high of $504 billion.
- The realized cap is increasing at a rate of $54 billion per month, indicating a significant influx of new capital into the crypto space, similar to early 2021.
- Long-term HODLers are transferring their coins to short-term speculators as Bitcoin reaches new all-time highs.
- The proportion of wealth held by “Young coins” (coins moved within the last 3 months) has increased by 138% since October 2023.
- The BTC supply held by long-term holders has decreased by 660,000 coins since November 2023, while short-term holder supply has increased by 810,000 coins.
- The “realized price” of Bitcoin is rising, moving one standard deviation above its long-term mean, as long-term holders realize significant gains.
- The spent-output profit ratio (SOPR) shows that current spenders are locking in an average profit of 27%, indicating a healthy balance between distribution pressure and new demand.
Institutions vs. Retail Buyers
Vincent Maliepaard, Managing Director at IntoTheBlock, believes that the market is entering a state of euphoria but suggests that retail buyers have not entered in significant numbers yet. Here are the key points:
- The number of new Bitcoin addresses has not significantly increased since the beginning of the year, indicating that retail buyers may not be responsible for the recent market pump.
- Institutions are likely driving Bitcoin’s recent surge, particularly through buy pressure within new Bitcoin spot ETFs.
- The increasing number of on-chain transactions with a volume larger than $100,000 supports the theory that institutions are responsible for the current market movement.
Expert Opinions on Demand Drivers
Bitwise CEO Matt Hougan suggests that retail investors and family offices continue to be major drivers of demand for Bitcoin ETFs, while corporations are just starting to enter the market. Here are the key points:
- Hougan believes that retail investors and family offices are still a significant force behind the demand for Bitcoin ETFs.
- Corporations are beginning to enter the market but have not yet had a substantial impact on demand.
Hot Take: Bitcoin Market Entering Euphoria Zone
Bitcoin is currently experiencing a surge in the market reminiscent of its strongest historical price runs. The increase in on-chain activity, such as the rising realized cap and the transfer of coins from long-term holders to short-term speculators, indicates a growing euphoria in the market. However, it is unclear whether this surge is driven by institutions or retail buyers. While some experts believe that institutions are responsible for the recent pump, others argue that retail investors and family offices continue to be major drivers of demand for Bitcoin ETFs. Regardless of who is behind this surge, it is clear that Bitcoin is entering a euphoria zone with increased capital inflows and significant wealth redistribution among holders.
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