Glassnode: Bitcoin Is Currently In “Bear To Bull” Transition Period
25 Septiembre 2022 - 2:00PM
NEWSBTC
Data from Glassnode suggests Bitcoin is currently in the historical
bear market to bull market transition period. Bitcoin Correlation
Between Price And Supply In Profit Has Recently Been Below 0.75 As
per a recent report by Glassnode, the BTC correlation between the
price and the supply in profit generally observes multiple drops
below 0.75 during transitional periods. The “supply in profit” is
an indicator that measures the percentage of the total Bitcoin
supply that’s holding some profit right now. The metric works by
looking at the on-chain history of each coin to see what price it
was last moved at. If this previous selling price is less than the
current BTC value for any coin, then that particular coin has some
unrealized profits at the moment. Related Reading: Bitcoin aSOPR
Profit-Loss Junction Continues To Act As Resistance The correlation
between the crypto’s price and its supply in profit tells us
whether the two metrics have been moving in the same direction or
not. Now, here is a chart that shows the trend in 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 the
price and the supply in profit are both moving in the same
direction. On the other hand, negative values imply they are going
opposite ways. As you can see in the above graph, Bitcoin has
historically had values above 0.9 for a majority of the time during
each of the previous price cycles. However, during periods of
transition between bull markets and bear markets (as well as vice
versa), the indicator usually observes multiple drops below 0.75.
According to the report, these deviations occur in the case of bear
to bull transitions because at late bear market stages, sellers
turn exhausted while the remaining investors become reluctant to
move their funds out of frustration, thus decreasing the
correlation between price and supply in profit. Related Reading:
Number Of Bitcoin Addresses Sending BTC To Exchanges Continues To
Drop And during the opposite transitions, the supply in profit
generally surges to almost 100% (as the price rises to a new ATH),
thus diminishing any correlation with the price. Recently, the
indicator has observed multiple plunges below the 0.75 threshold,
suggesting that Bitcoin is currently in the historical bear to bull
transition zone. BTC Price At the time of writing, Bitcoin’s price
floats around $19.1k, down 4% in the last seven days. Over the past
month, the crypto has lost 10% in value. The below chart shows the
trend in the BTC price over the last 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
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