According to a recent report from on-chain analytics firm Glassnode, despite sideways price movements, Bitcoin’s market profitability remains strong. The report highlights significant trends in investor behavior and market conditions that may indicate future volatility.
During market panic, Bitcoin investors saw a significant increase
As Bitcoin traded within the $60,000 range, Glassnode noted a noticeable presence of fear and bearish sentiment among investors. However, the overall market profitability, measured by the MVRV ratio, indicates that most investors still hold substantial gains.
The report from Glassnode elaborates, “The average coin is still held at double its profit-multiplier. This level typically describes the ‘exuberance’ and ‘optimism’ phase of a bull market.”
Furthermore, Glassnode’s analysis reveals different profit and loss patterns among investors. The average profitable coin holds unrealized gains of $41,300, influenced by early movers and lost coins.
In contrast, the average unprofitable coin has an unrealized loss of $5,300, primarily held by short-term investors. Glassnode’s researchers explain, “Both of these metrics help identify potential sell pressure as investors try to hold onto their gains and/or avoid holding onto larger unrealized losses.”
The report also discusses the consolidation of Bitcoin’s price within a specific range between $60,000 and $70,000 since March. The low volatility during this period has led to widespread indecision in the market.
Glassnode utilizes various on-chain indicators to outline different stages of market cycles, pointing out that Bitcoin is currently in a bull market phase. Key price levels, such as the true market average of $50,000, are crucial for maintaining the macro bullish trend.
Overall, Glassnode’s report emphasizes a strong and cautious outlook for the Bitcoin market. While profitability remains high, the potential for increased volatility and critical price levels will determine the market’s trajectory in the coming months.
What are your thoughts on Glassnode’s on-chain report? Share your ideas and perspectives on this topic in the comments section below.