Bitcoin Markets are Entering a Phase of Euphoria, According to Glassnode

When it comes to price forecasts for Bitcoin (BTC), many market participants work with models that assume cycles. From this perspective, the undulations of the Bitcoin price curve are completely normal and a good approach for trading strategies. The analysts at Glassnode write in their latest report that the Bitcoin markets have currently entered a phase of euphoria – and are wondering how long this could last.

The starting point of the analysis is Bitcoin’s boom phase from the end of 2021, when BTC set several all-time highs of over $60,000. These have now been replaced by new record prices for Bitcoin in March, which broke the $70,000 mark.

According to Glassode, this has obviously begun a new cycle for Bitcoin, for which analysts use the term euphoria. One argument: Only a tiny proportion of Bitcoin investors are currently in the red with their investment; the high price phase basically means profits for everyone.

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According to Glassnode, a typical phenomenon that is currently occurring are smaller price corrections

In fact, Bitcoin’s price curve has been fluctuating between $73,000 and $64,000 for a good three weeks. Compared to the cycle from 2021, the corrections are still shallow at around 10 percent, according to Glassnode: In 2021, a 25 percent price correction was the benchmark. Here one can derive an argument that the current euphoria phase on the Bitcoin markets is still in its early stages. It fits that the Bitcoin Fear and Greed Index stands at 76 on a scale from 0 for extremely fearful to 100 for extremely greedy.

It is also clear to Glasnode that the Bitcoin ETFs that have been approved in the USA since January have a say in price developments. Around 30 percent of the Bitcoin trading volume worldwide is already achieved through the ETF markets, which have already generated capital inflows of around $13 billion.

Also interesting: When the US stock exchanges are closed on the weekends and ETF trading is therefore paused, the volumes on the crypto exchanges have recently also collapsed. Compared to the BTC cycle from 2021, Bitcoin trading volumes are already high, but not yet at record levels – this is another indication that the euphoria phase is just beginning.

Conclusion: Glassnode believes that Bitcoin still has room for improvement

Glassnode loosely translates to “crystal ball” in German and the analysts are aware that their assessments cannot claim to be infallible. But they refrain from mentioning, for example, the upcoming Bitcoin Halving next week – even though this event, which occurs every four years, has historically had a decisive influence on the BTC cycles.

If you read the Glassnode analysis optimistically, a lot of positive momentum can still be expected for the price development of Bitcoin this year and the euphoria potential will not be exhausted for some time. But as always, many analysts have already made a big mistake with their Bitcoin forecasts and you as an investor should definitely run through various scenarios internally.

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(Featured image by satheeshsankaran via Pixabay)

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First published in BLOCK-BUILDERS.DE. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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