Bitcoinโs Robust Bull Market Continues with Minimal Price Correction
Bitcoinโs current bull market run is one of the most robust in history, with the assetโs latest price correction looking insignificant compared to past cycles, according to analysis from on-chain intelligence firm, Glassnode. Since reaching its 3-year bottom at $15,500 in November 2022, Bitcoinโs price has not suffered more than a 20% drawdown during its climb back to all-time highs. Even after a significant pullback over the weekend to just under $67,000 at the time of writing, Bitcoin is only down 8% on the week.
A Strong Bull Market Driven by Spot Demand
Glassnode lead analyst James Check noted that this speaks to one of the most robust BTC bull markets in history. Compared to past cycles, the current bull market has shown significantly less volatility and drawdown periods. In previous cycles, temporary pullbacks exceeding 30% were common. For example, during the 2018-to-2021 bull market, Bitcoin experienced a drastic 60%+ pullback on โBlack Thursdayโ in March 2020 before rallying over 15X in the following year.
Long-Term Holders Selling Their Coins
Blockchain data reveals that long-term holders have been selling their coins as Bitcoin approached its previous all-time high. These holders, defined as entities holding their coins for at least 155 days, have sold approximately 735,000 BTC since December. Notably, around 60% of these coins can be attributed to massive outflows from the Grayscale Bitcoin Trust (GBTC).
Rise in MVRV Ratio and Realized Cap
The climb in Bitcoinโs price this year has increased its MVRV ratio, which measures the amount of profit the average coin is sitting on at the time it was last bought. Currently standing at $70,800, the metric has risen one standard deviation above its mean. Historically, this level has often triggered brief bull market selloffs as investors feel incentivized to cash out. However, the selloff has also driven up Bitcoinโs โrealized capโ as old coins are bought up by new investors at higher prices. This indicates a significant influx of capital into Bitcoin and suggests that the bull market is not yet finished.
On-Chain Data Supports Bullish Outlook
Glassnodeโs analysis concludes that on-chain data remains remarkably reliable, with the current all-time high break resembling previous ATH breaks. This further supports the notion that Bitcoinโs bull market is strong and likely to continue.
Hot Take: Bitcoinโs Resilient Bull Market Defies Expectations
Bitcoinโs current bull market has demonstrated remarkable strength and resilience, defying expectations and surpassing previous cycles in terms of spot demand and minimal price correction. Despite reaching new all-time highs, Bitcoin has experienced only modest drawdowns, with no decline exceeding 20%. This is a stark contrast to past cycles where temporary pullbacks of over 30% were common.
The ongoing bull market has seen long-term holders selling their coins, potentially indicating profit-taking as Bitcoin approached its previous ATH. However, this has been offset by large inflows of fresh capital from new investors, driving up Bitcoinโs realized cap.
The MVRV ratio reaching one standard deviation above its mean suggests that some investors may be tempted to cash out, leading to short-term selloffs. However, the overall trend remains positive, with on-chain data supporting a bullish outlook for Bitcoin.
As Bitcoin continues its upward trajectory, it is important for investors to remain cautious and monitor market conditions. While the current bull market appears robust, volatility and price corrections are inherent in cryptocurrency markets. Therefore, it is essential to stay informed and make well-informed investment decisions.
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