Glassnode Weekly Report: Bitcoin’s greater volatility is coming! But Bitcoin is still in a bull market

This site (120Btc.coM): Bitcoin hit a low of $57,800 this morning (4th), the lowest in 2 months. From the high of $73,738 in mid-March, the retracement rate is close to 22%.

Many bullish investors have been confused by this wave of market washouts, but according to the latest weekly report released earlier by on-chain data analysis company Glassnode, Bitcoin's greater volatility may not be over yet.

Bitcoin volatility is about to amplify

Glassnode wrote in a report that volatility has declined across multiple time frames, with Bitcoin’s realized volatility (calculated once every 30 days) rising at 1 week, 2 weeks, and 1 month The monthly, 3-month, 6-month and 1-year time frames all show negative numbers. Therefore, it is difficult for the data to go lower, which implies that the fluctuations are about to become larger.

Glassnode also evaluates the percentage change of the highest and lowest prices over the past 60 days to gauge market volatility. According to this indicator, Bitcoin’s market volatility is also found to be compressed to rare levels. Glassnode Warning: This situation usually occurs after a long-term consolidation and before significant market fluctuations.

Glassnode further enhances volatility assessment with the Sell-Side Risk Ratio, which evaluates the absolute sum of investors’ realized profits and losses, relative to the realized market capitalization. Here's how to judge this indicator:

• High values: Indicates investors are selling at a large profit or loss relative to cost, indicating that the market may need to re-find its balance, often accompanied by high price volatility.

• Low value: Indicates that most expenses are close to their breakeven costs, indicating that the market has reached a certain degree of balance, which usually means that profits and losses within the current price range have been exhausted and the market is in a low volatility environment.

Glassnode said the sell-side risk ratio for short-term holders (STH) has fallen to an all-time low, with only 274 of 5,083 trading days (5%) recording lower values, indicating that during price consolidation A degree of equilibrium has been achieved and hints at expectations of increased volatility in the near term.

Bitcoin is still in a bull market

But even though Bitcoin hit a two-month low and the Fear and Greed Index turned from neutral to fearful at 44, Glassnode said that Bitcoin’s MVRV indicator shows that a large proportion of Bitcoin Coin investors remain profitable.

The chart below shows that MVRV is currently 2.04, indicating that investors on average have more than twice the profit. Glassnode said this level typically depicts an "enthusiastic" and "cheerful" bull market phase.

In addition, if you look at the ratio between unrealized profits and losses per Bitcoin, you can also find that book gains are 8.2 times book losses. Only 18% of trading days in history are greater than this value. All of this is part of the euphoric bull market phase, so Glassnode’s report hints that the bull market is not over yet.

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