According to a report from Glassnode, as the Bitcoin halving event approaches, investor interest in the crypto market has reached levels similar to those seen during the 2021 bull run. This has increased the likelihood of a significant price movement.
The market is currently experiencing a state of euphoria, with Bitcoin’s price continuing to perform impressively in 2024 and reaching new all-time highs in March. Since the introduction of spot Bitcoin ETFs in the U.S. on January 11, BTC spot trading volume has soared, with daily volumes peaking in March. Glassnode has observed that the market has entered a euphoric phase, with profit-taking increasing significantly.
Data indicates that Bitcoin’s bullish momentum has been building since October 2023, as the market has entered a period of high liquidity and volatility. Glassnode has reported that BTC’s year-to-date performance is supported by strong demand in spot markets, resembling a similar trend seen during the 2021 bull run.
Furthermore, Bitcoin’s flow in and out of exchanges has also increased significantly since July 2023. Glassnode data shows that the monthly average of total inflows and outflows from exchanges currently stands at $8.19 billion per day, which is substantially higher than during the 2021 bull market peak.
With high liquidity and the upcoming Bitcoin supply halving, a sense of euphoria pervades the market, indicating that the bull market is in full swing. Bitcoin’s realized profit has also increased to 1.8% in March, surpassing the peak seen in 2021. This suggests that 1.8% of the market cap was locked in as profit over a 7-day period.
Glassnode expects new capital to flow into Bitcoin, as profit taken by one investor is met with demand from buyers on the other side. This influx of capital indicates that a new wave of investors is entering the market, as evidenced by the increasing share of wealth held by coins younger than 6 months in the Realized Cap HODL Waves.
The aggregate share of coins younger than 6 months has risen sharply since early 2023, reaching 47% compared to 20% on January 1, 2023. During previous bull markets, this metric reached between 84% and 95%.
However, the chances of a sustained bullish rally in the coming weeks are low due to profit-taking, as Bitcoin trades above its 2021 all-time high.
It is important to note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risk, and readers should conduct their own research before making any decisions.