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Analysts Reveal These Metrics Indicate Larger Move for Crypto
- Despite market volatility and dips below US$60K, Glassnode sees strong investor profitability with many experiencing a 2x return on investment.
- Glassnode’s analysis highlights a high unrealised profit to loss ratio, indicating a bullish sentiment and a potential upcoming major market move.
- Swissblock anticipates a recovery in July for Bitcoin, supported by positive ETF flows, seasonal trends, despite potential sell-side pressures.
Amid continued sideways action for Bitcoin – apart from a few dips below US$60K (AU$89.4K) – experts are divided about where to next. Analysts at Glassnode said the “Bitcoin market is in an interesting spot”, which is based on the fact that a large number of investors are profitable, many have seen a 2x on their investment.
Related: Bitcoin Dips Below $60K as Fed Chair Dampens Rate Cut Hopes
With what they call “heavily compressed volatility measures” the analysts believe there is a bigger move on the cards.
Investor Profitability Remains Strong, Unrealised Profits Indicate Potential Upswing
Glassnode said as Bitcoin prices fell to the US$60k range, investor sentiment turned fearful and bearish amid market stagnation. However, the MVRV Ratio (market-value-to-realised-value) indicates that average investor profitability is strong, with a 2x profit multiple, marking a transition between “Enthusiastic” and “Euphoric” bull market phases.
The average coin in profit is holding an unrealized gain of +$41.3k, with a cost basis of approximately $19.4k. The average coin in loss is holding an unrealized loss of -$5.3k, and has a cost basis of approximately $66.1k.
Glassnode The MVRV ratio is a key metric in crypto that provides insights into market dynamics and investor behaviour, helping to evaluate the valuation of a cryptocurrency through its measurement and implications.
Glassnode posits that the high ratio of unrealised profit to loss indicates a strong bullish sentiment in the market, reminiscent of previous euphoric phases that often precede market peaks. They added that the March ATH following ETF approvals highlights this as a potentially speculative period similar to past bull market peaks
Swissblock Says July Could Be a Strong Month for BTC
After a bearish June, analysts at Swissblock reckon July might see a bit of relief for investors, with a historic return of 9.6%. This forecast comes despite the Mt. Gox repayments and other potential events which may spook investors.
Despite potential sell-side pressure from the repayments to Mt. Gox creditors and the consequent FUD created from the uncertainty it creates for the investors, July seemed to guard a good omen.
Swissblock According to the analysts solid US ETF flows, positive seasonal trends and improved liquidity add to the bullish outlook.
Related: CryptoQuant: BTC Miner Capitulation May Signal Bottom
Nevertheless, immediate metrics still show bearish sentiment, with bearish price momentum, neutral onchain fundamentals and relatively high market risk, as seen in the speedometer above.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
