According to Glassnode’s report released on Tuesday, this year’s significant surge in the crypto market was predominantly fueled by activity in the Bitcoin spot market. On-chain analysis provided valuable insights into the current phase of the market cycle.
Bitcoin Spot Volume: Now Versus 2021
Glassnode highlighted that spot volumes surged to $14.1 billion in March, reminiscent of levels observed during the peak of the 2020-2021 bull market. However, these volumes have moderated to around $7 billion per day in April.
Drawing parallels to the 2021 bull run, applying a fast/slow momentum indicator to spot volume reveals similarities. As of April 6, Bitcoin’s 30-day moving average for volume stood at $9.59 billion, notably surpassing its 180-day volume average of $5.95 billion.
Furthermore, net exchange flows, encompassing both inflows and outflows from Bitcoin exchanges, have surpassed 2021 levels, reaching $8.19 billion per day.
In summary, Glassnode observed that Bitcoin’s year-to-date price performance is bolstered by a substantial increase in spot trade volume and on-chain exchange flows.
In a recent analysis conducted by lead Glassnode analyst James Check, it was revealed that spot ETFs now wield significant influence, accounting for approximately 30% to 50% of the major factors impacting Bitcoin’s spot price.
This influence is particularly evident during weekends when the newly introduced ETFs remain inactive, leading to a notable decrease in on-chain spot volumes.
Similar to trends observed in 2021, exchanges have exhibited a significant bias towards taker-buy volume. In the past month, the spot volume delta between taker-buy and maker-sell volume on exchanges reached $143.6 million. This stands in stark contrast to the net sell-side bias experienced by exchanges throughout 2023 until October, despite occasional pullbacks in Bitcoin’s price during that period.
The State Of The Bitcoin Cycle Today
Examining Bitcoin’s price performance, the cryptocurrency recently surpassed its 2021 all-time high of $69,000 in March and has since hovered close to that pinnacle, undergoing consolidation. Historical data indicates that following breaks of previous all-time highs, Bitcoin has experienced minimal major pullbacks, implying that the current “euphoria” phase of the bull market is still in its nascent stages.
Furthermore, analyzing capital invested by short-term holders (holding for less than 6 months) reveals intriguing patterns. In the last two bull cycles, this metric peaked between 84% and 95% based on Bitcoin’s “realized cap,” which measures the value of all coins in the network based on the time of each coin’s last movement.
Presently, this figure stands at 47%, significantly higher than the 20% recorded in January but not yet reaching levels indicative of market peaks.
Glassnode suggests that this data implies a relatively balanced distribution of capital within the Bitcoin holder base, with a significant portion held by long-term holders alongside new demand.
