Bitcoin Market Flashes High Risk Signals: Glassnode – Unchained

Nine out of ten risk framework metrics are flashing very high risk signals, according to Glassnode, which suggest a high degree of profit tasking and speculation in the near-term.

It’s been a volatile 24 hours for bitcoin, with the asset losing nearly 8% after hitting a new all time high above $73,800. Analysts at on-chain analytics firm Glassnode say that’s something to be expected, given the current state of the market.

Of the 10 risk framework metrics, nine are flashing a “very high” risk signal, Glassnode noted in a post on X. This includes the percentage of supply in profit metric, which measures the proportion of coins with a cost-basis lower than the current price of the asset.

In this thread, we’re offering a status update on our #Bitcoin Risk Assessment Framework, a tool for discretionary traders to gauge market sentiment and underlying risk. 🧵👇 pic.twitter.com/UcAEDwghyg

— glassnode (@glassnode) March 14, 2024

“Currently trading at 99.3%, this metric is in the Very High Risk phase. This structure first appeared 94 days ago in this cycle,” noted the analysts.

Another metric that signalled high risk was the Net Unrealized Profit/Loss (NUPL) indicator, which shows the state of market sentiment. Currently, that indicator sits at a reading of 0.64, meaning that the market is in a state of euphoria.

During these times, all attention typically turns towards long term holders, and those that are less inclined to spend their coins. Glassnode’s long term holder spending binary indicator shows when this subset of people increase their spending patterns on-chain. 

“The period of Very High Risk, where the LTH [long term holders] spending rate is heated with the price reaching the last ATH, started 11 days ago,” the analysts observed. 

The only indicator that remains in low territory is the miners fee revenue binary indicator, which measures the proportion of days over the last month where the fee market experienced increasing pressure from one day to the next.

On the spot bitcoin exchange-traded fund (ETF) front, however, demand still remains in high territory. BlackRock’s iShares Bitcoin Trust (IBIT) traded 99.3 million shares on Thursday, pushing daily trading volume to a record $3.7 billion pm the day.

So far, bitcoin ETFs have seen $65 billion in volume this month, already surpassing the total trading volume for the month of February by more than $20 million.