In its recent analysis, the crypto analytics firm Glassnode has detected that Bitcoin‘s on-chain metrics have reached a ‘high-risk’ level, an occurrence typically associated with the beginning phase of a bull market. Glassnode’s insights highlight a pivotal shift from a ‘medium risk’ to a ‘high risk’ zone, suggesting increased profitability for long-term Bitcoin investors and signaling potential for market upswing.
Assessment of Market Conditions
In the latest Glassnode report, it was revealed that Bitcoin’s valuation metrics, notably the Market Value to Realized Value (MVRV) ratio for long-standing holders, pointed towards Bitcoin being potentially overvalued. This metric is key in assessing whether Bitcoin’s price is inflated beyond its ‘fair value.’ The analysis concluded that out of ten metrics, seven, including the supply profitability and the net unrealized profit and loss, have entered a zone with a ‘high’ or ‘very high’ risk level.
Bitcoin ETFs Spark Investor Interest
The report also noted a subdued risk in aspects such as the demand for Bitcoin block space and short-term profit turnaround for new entrants into the market. The attention of investors has been drawn towards newly approved spot Bitcoin ETFs in the US, which have seen significant capital inflows. Bitcoin’s price witnessed a notable uptick over the past week, a rise further buoyed by diminishing outflows from the Grayscale Bitcoin Trust and substantial inflows into Bitcoin ETFs since their introduction in mid-January.
Furthermore, evidence from SoSoValue indicated that the US Spot Bitcoin ETFs experienced their highest influx of funds to date on February 9, with a substantial $541 million in net entries. Contrastingly, the same day marked the lowest level of outflows for Grayscale’s GBTC, revealing a 91% drop from the record daily outflows witnessed in January.