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As per the latest on-chain measurements, Bitcoin (BTC) is still firmly in the “euphoria phase,” as per the description provided by a blockchain analytics business, even after a recent market fall.
According to the most recent data from Glassnode, the price pullback of Bitcoin is rather mild when compared to prior cycles, suggesting that the cryptocurrency may still be in the early phases of a positive trend.
The paper presents historical data that shows that Bitcoin’s pullbacks have traditionally been modest, even in the face of large profit-taking by current holders. Several price corrections larger than -10% have occurred during previous euphoric stages. Some of these corrections have been significantly more severe, frequently topping a 25% threshold.
All the same, since hitting its all-time high (ATH), Bitcoin has only gone through two declines of around 10% or more under the present market conditions.
Glassnode’s on-chain analysis of major exchanges reveals that Bitcoin’s resilience over the past year is primarily attributed to inflows from the spot market. The firm notes that the cryptocurrency’s recent correction is bolstered by the influx of “new demand” from fresh market participants.
Strong demand is indicated by the spike in spot trading volumes and on-chain movements related to exchanges. Interestingly, the Cumulative Volume Delta study indicates that market players have mostly acted as makers rather than takers, exhibiting a patient attitude, and that bid-side demand has been very robust.
Compared to past experiences, the wealth distribution seems to be rather evenly distributed between long-term holders and recent market participants, suggesting that the present “euphoria” period may still be in its early stages.