On-chain indicators assessing Bitcoin’s ( BTC ) value have entered a “high-risk” zone and could mean the cryptocurrency is in the initial stages of a bull market, says the crypto analysis platform Glassnode.
In a Feb. 10 X post, Glassnode shared that an indicator to identify Bitcoin’s long-term valuation compared relative to its market value had pushed above the “mid-risk” zone and is firmly in the “high-risk” band.
The high-risk level is typically witnessed during the early stages of a Bitcoin bull market as it shows long-term investors have returned to a “meaningful level” of profitability, Glassnode noted in an earlier Feb. 8 report .
After the challenging recovery since the FTX collapse, this indicator has advanced to 2.06, entering the High Riskregime.
— glassnode (@glassnode) February 9, 2024
These levels are typically seen during the early stages of bull markets, as long-term investors return to a relatively meaningful level of profitability. pic.twitter.com/XMSjJjUc1z
The long-term holder market value to realized value (MVRV) indicator aims to identify when Bitcoin is over or undervalued compared relative to its “fair value.”
It contrasts the “market value” of Bitcoin with its “realized value” — the price when Bitcoin was transferred between long-term holder wallets — it “strips out” short-term market sentiment and provides a metric that shows if the market is overheated.
The price of Bitcoin has steadily increased over the past week, climbing from $42,317 on Feb. 4 to $48,582 at the time of publication, per CoinGecko.
