Bitcoin is a blockchain (BTC( ) remains in an “euphoria stage” despite recent corrections based on metrics on the chain.
It’s a brand new world ReportageThe firm claims that BTC’s recent downward price movement is comparatively mild compared with previous cycles. This suggests the crypto-king is at the beginning stages of a bull market.
If we look at the size of the drawdowns that we mentioned earlier, it is clear that, despite large profits taken by holders of existing securities, the pullbacks are historically low.
Comparing the ATH break (all-time peak) in previous cycles, one could argue that this current Euphoria (market is price discovery phase) is relatively new. Price declines of more than -10% have been common in previous Euphoria periods.
Since the ATH broke, there have been only two 10%+ market corrections.”
Glassnode claims that, based on a on-chain study of industry’s largest exchanges and the strength Bitcoin has shown over the past year was largely attributed to the inflows coming from the spot markets. Glassnode also claims that BTC’s short-term correction has been supported by “new demand” coming from new entrants into the market.
The strong performance of Bitcoin in the past 12 months has been supported by an impressive increase in spot trade volume and flows on-chain associated with exchanges. We can see that demand has been very strong by analyzing Cumulative Volume Delta. However, bids have taken the maker’s side, rather than taking the taker’s side.
Profit-taking is on the rise, but has slowed down over the past few weeks. “The balance between new and long-term investors is roughly balanced, indicating that the ‘Euphoria’ phase from an historical perspective is still fairly early.”
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