Data from Glassnode suggests that Bitcoin is currently in the historic transition period from bear market to bull market.
Bitcoin’s Correlation Between Price and Profit Supply Has Recently Been Below 0.75
According to a recent report by Glassnode, the BTC correlation between price and profit supply typically sees multiple dips below 0.75 during transition periods.
“Supply in Profit” is an indicator that measures the percentage of the total Bitcoin supply that currently holds a certain profit.
The metric works by looking at each coin’s on-chain history to see what price it was last moved at. If that previous sell price is lower than the current value of BTC for any coin, then that particular coin has unrealized profit at the moment.
The correlation between the price of the crypto and its profit bid tells us whether the two metrics are moving in the same direction or not.
Now, here is a chart that shows the trend of this Bitcoin correlation over the history of the crypto:
The value of the metric has been low multiple times in recent days | Source: Glassnode's Market Pulse
Whenever the correlation is positive, it means that the price and the profit supply are both moving in the same direction. On the other hand, negative values imply that they go in opposite directions.
As you can see in the chart above, Bitcoin has historically had values above 0.9 for the majority of the time during each of the previous price cycles.
However, during periods of transition between bull and bear markets (as well as vice versa), the indicator typically sees multiple dips below 0.75.
According to the report, these deviations occur in the case of bear-to-bullish transitions because in late stages of the bear market, sellers become exhausted while remaining investors are reluctant to move their funds out of frustration, thus decreasing the correlation. between the price and the profit offer. .
And on opposite transitions, the take profit offer usually reaches close to 100% (when price rises to a new ATH), thus decreasing any correlation with price.
Recently, the indicator has seen multiple dips below the 0.75 level, suggesting that Bitcoin is currently in the historic bear-to-bull transition zone.
BTC price
At the time of writing, the price of Bitcoin is hovering around $19,100, down 4% in the past seven days. Over the past month, the crypto has lost 10% in value.
The chart below shows the BTC price trend over the past five days.
Looks like the value of the crypto hasn't shown much movement in the past few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com
Data from Glassnode suggests that Bitcoin is currently in the historic transition period from bear market to bull market.
Bitcoin’s Correlation Between Price and Profit Supply Has Recently Been Below 0.75
According to a recent report by Glassnode, the BTC correlation between price and profit supply typically sees multiple dips below 0.75 during transition periods.
“Supply in Profit” is an indicator that measures the percentage of the total Bitcoin supply that currently holds a certain profit.
The metric works by looking at each coin’s on-chain history to see what price it was last moved at. If that previous sell price is lower than the current value of BTC for any coin, then that particular coin has unrealized profit at the moment.
The correlation between the price of the crypto and its profit bid tells us whether the two metrics are moving in the same direction or not.
Now, here is a chart that shows the trend of this Bitcoin correlation over the history of the crypto:
The value of the metric has been low multiple times in recent days | Source: Glassnode's Market Pulse
Whenever the correlation is positive, it means that the price and the profit supply are both moving in the same direction. On the other hand, negative values imply that they go in opposite directions.
As you can see in the chart above, Bitcoin has historically had values above 0.9 for the majority of the time during each of the previous price cycles.
However, during periods of transition between bull and bear markets (as well as vice versa), the indicator typically sees multiple dips below 0.75.
According to the report, these deviations occur in the case of bear-to-bullish transitions because in late stages of the bear market, sellers become exhausted while remaining investors are reluctant to move their funds out of frustration, thus decreasing the correlation. between the price and the profit offer. .
And on opposite transitions, the take profit offer usually reaches close to 100% (when price rises to a new ATH), thus decreasing any correlation with price.
Recently, the indicator has seen multiple dips below the 0.75 level, suggesting that Bitcoin is currently in the historic bear-to-bull transition zone.
BTC price
At the time of writing, the price of Bitcoin is hovering around $19,100, down 4% in the past seven days. Over the past month, the crypto has lost 10% in value.
The chart below shows the BTC price trend over the past five days.
Looks like the value of the crypto hasn't shown much movement in the past few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com