• Bitcoin [BTC] started the year with a strong rally of 23.3%, leading to many investors and miners netting unrealized gains.
• Glassnode assessed a few on-chain metrics to determine the meaning behind last week’s recent price surge and underlying factors behind the same.
• The metrics revealed that BTC’s price surpassed the psychological level of $19,500, its 200D-SMA for 381 days and its Realized Value, indicating that the average BTC holder experienced a net unrealized profit in the last week.
Bitcoin [BTC] has seen a dramatic increase in its price over the past few weeks, with the cryptocurrency starting the year with a strong rally of 23.3%. This has resulted in a wide range of investors and miners seeing their net holdings and operations return to profitability, as many have gained from the unrealized gains. In order to better understand the meaning behind last week’s recent price surge and the underlying factors behind the same, leading on-chain data provider Glassnode has assessed a few on-chain metrics.
The first metric considered by Glassnode was BTC’s 200-day Simple Moving Average (200D-SMA). This metric is often utilized as a benchmark for identifying macroeconomic trends across all types of crypto assets, as it can help investors and traders alike determine whether the market is in a bullish or bearish trend. With the price uptick in the last week, Glassnode found that BTC’s price surpassed the psychological level of $19,500. Additionally, it was noted that BTC markets display a consistent pattern of cycles, with the current cycle trading below the 200D-SMA for 381 days, which is only slightly less than the 386 days of the bear market in 2018-2019. Should BTC’s price break above the 200D SMA, one might expect the price to rally as it did in 2019 and 2021.
Furthermore, Glassnode also found that the recent price rally caused BTC’s value to exceed its Realized Value, indicating that the average BTC holder experienced a net unrealized profit in the last week. This is especially noteworthy considering the current bear market has lasted for 179 days below the Realized Value. Therefore, it appears that the aSOPR’s attempt to retest the value of 1.0 has signaled a bullish trend in the current market.
Overall, Glassnode’s analysis of BTC’s on-chain metrics has revealed that the recent price surge has been largely driven by the unrealized gains of many BTC holders. This is further confirmed by the fact that BTC’s price has surpassed the 200D-SMA, Realized Value and the psychological level of $19,500, all of which suggest that the market sentiment is currently bullish. As such, investors and traders should keep a close eye on these metrics to better understand the direction of BTC’s price in the weeks ahead.