- Glassnode’s LTH-MVRV metric suggests that Bitcoin is entering “high-risk” territory, which is typical of early bull markets.
- The supply-to-earnings percentage ratio suggests that Bitcoin could be on the verge of a “euphoric phase” of market growth.
Analyst firm Glassnode notes that an on-chain metric for Bitcoin (BTC), which in the past indicated the early stages of a bull market, is now manifesting itself.
According to Glassnode, the Bitcoin Long-Term Holder MVRV (LTH-MVRV), which tracks the behavior of long-term BTC investors,has reached a “high risk” level.
Glassnode shows a chart suggesting that BTC tends to experience a significant market expansion when the LTH-MVRV signal rises above the high risk area. After the difficult recovery from the FTX dip, this indicator has risen to 2.06, entering the high-risk area.
These levels are typically seen in the early stages of bull markets as long-term investors return to relatively significant levels of profitability.
Glassnode also examines its Percentage of Supply at Profit (PSIP) metric, which measures the proportion of coins whose base cost is below the current market price. According to the company, this metric suggests that BTC could bejust a few thousand dollars away from entering a “euphoric phase” of the bull market .
When this indicator is trading above the upper band, it has historically been alignedwith the market entering the “euphoric phase” of a bull market. During the recent market rally around the launch of the spot ETF, this indicator reached a very high risk level, whereupon it fell back to $38,000.
This analysis suggests that Bitcoin could be on the verge of a new bull market, with on-chain indicators showing promising signs of profitability and expansion. Entering the euphoric phase indicated by the PSIP could mean a period of significant gains for Bitcoin investors, especially considering the historical context of these metrics.
