Analytics firm Blockchain says Bitcoin (BTC) is still in a “euphoria phase” despite its recent correction based on on-chain metrics.
In a new report, the company claims that BTC’s current downward price trend is still moderate compared to previous cycles, suggesting that the crypto king is in the early stages of a bull run.
“If we return to the scale of withdrawals we alluded to earlier, we can see that despite large-scale profit-taking by existing holders, the scale of withdrawals remains historically low.
If we compare the breakout of the ATH (all-time high) during previous cycles, we could argue that the current phase of euphoria (price discovery market) is still relatively young. Previous phases of Euphoria have seen many price drops greater than -10%, the majority being much deeper, with 25%+ being commonplace.
The current market has only seen two corrections of around 10%+ since the ATH breakout.
Glassnode claims that, based on on-chain analysis of the industry’s largest exchanges, Bitcoin’s strength over the past year is largely due to inflows from the spot market. The company also claims that BTC’s short-term correction is supported by “new demand” from new market entrants.
“The strong performance of the Bitcoin market over the past 12 months is supported by a remarkable increase in spot trading volumes and associated on-chain flows of exchanges. By analyzing the cumulative volume delta, we can also assess that demand has been remarkably strong, even as bids have patiently sided with the maker over the taker.
With the market now above the 2021 ATH, profit-taking has accelerated but cooled in recent weeks. The balance of wealth is roughly balanced between long-term holders and new demand, suggesting that the “euphoria” phase is still relatively early from a historical perspective.
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