Bitcoin Moves Into a High-Risk Area, Indicating the Beginning of a Bull Market

According to cryptocurrency analytics platform Glassnode, on-chain indicators evaluating the value of Bitcoin (BTC) have moved into a "high-risk" zone, which could signify the early stages of a bull market.

Glassnode’s Report :

In a post from February 10, Glassnode revealed that an indicator that measures the long-term valuation of Bitcoin relative to its market value has crossed over from the "medium risk" range into the "high risk" range. High risk levels are usually seen in the early phases of a Bitcoin bull market, as they signify that long-term investors have returned to profitability, according to a report published on February 8.

Long-term holders can use the Market Value to Realized Value (MVRV) indicator to gauge when Bitcoin is undervalued or overvalued in relation to its "fair value." Seven out of ten overall indicators, including net unrealized profit-loss and supplier profitability status, received a "high" or "very high" risk assessment from Glassnode.

Interest in ETFs

Glassnode, noting that Bitcoin block space demand and short-term profits for new investors are definitely in the “low risk” categories, added that sales have decreased following the approval of spot Bitcoin exchange-traded funds (ETFs) in the US. CoinGecko reports that last week saw a steady climb in the price of Bitcoin, which went from $42,317 on February 4 to $48,582. Last week’s strength in Bitcoin was attributed to decreased outflows from Grayscale Bitcoin Trust (GBTC) and $9.1 billion worth of inflows into nine spot Bitcoin ETFs since they launched on January 11.

With $541 million in net inflows on February 9, new United States Spot Bitcoin ETFs saw their biggest entry day, according to statistics from the cryptocurrency analytics platform SoSoValue. Furthermore, Grayscale’s GBTC marked its lowest day on February 9 with only $51.8 million in outflows, a 91% decrease compared to the record daily outflow of $620 million on January 23.