Investors’ interest in the crypto market has surged ahead of the upcoming Bitcoin halving event, which is expected to drive up the price of BTC, according to a report from Glassnode. This heightened speculative interest raises the possibility of a significant price move. The market is currently experiencing a state of euphoria as BTC continues to reach new all-time highs in 2024. The introduction of spot Bitcoin ETFs in the US in January has led to a surge in BTC spot trading volume, with daily volumes peaking in March. Glassnode noted that the market has entered a euphoric phase, with profit-taking increasing substantially. Data suggests that Bitcoin’s bullish momentum has been building since October 2023, as the market has become more liquid and volatile. BTC’s year-to-date performance is supported by strong demand in spot markets, resembling the structure seen during the 2021 bull run.
Bitcoin’s flow in and out of exchanges has also significantly increased 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, surpassing the peak of the 2021 bull market. With high liquidity and the upcoming Bitcoin supply halving, a sense of euphoria has engulfed the market, indicating the presence of a bull market. Bitcoin’s realized profit has also risen to 1.8% in March, reclaiming 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-taking by one investor is met with inflowing demand from the buying party on the other side.
In terms of market dynamics, this indicates that a new group of investors is entering the market, as evidenced by the rising 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 seen a significant increase since early 2023, rising from 20% on January 1, 2023, to 47% currently. During previous bull markets, this metric reached between 84% and 95%.
However, the likelihood of a sustained bullish rally in the coming weeks remains 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, and readers should conduct their own research before making any decisions.