According to Glassnode, Bitcoin is currently in a “Bear to Bull” transition period.
According to data from Glassnode, Bitcoin is in between a bear market and a bull market right now.
Bitcoin’s profit correlation between price and supply has recently fallen below 0.75.
A recent Glassnode report says that during times of change, the BTC correlation between price and supply in profit usually drops below 0.75 more than once.
The “supply in profit” indicator shows how much of the total supply of Bitcoin is currently making money.
The metric works by looking at each coin’s on-chain history to see what price it was last moved at. If the previous selling price is less than the current BTC value of any coin, then that coin currently has some unrealized profits.
The correlation between the price of a cryptocurrency and its supply in profit tells us whether the two metrics are moving in the same direction or not.
When the correlation is positive, it means that the profit price and supply are both moving in the same direction. Negative values, on the other hand, imply that they are going in the opposite direction.
But when markets are changing from bull to bear (or vice versa), the indicator usually shows more than one drop below 0.75.
According to the report, these differences happen when a bear market turns into a bull market. This is because at the end of a bear market, sellers get tired and frustrated investors don’t want to move their money. This makes the relationship between price and supply less clear.
And when the opposite happens, as the price goes up to a new ATH, the profit supply usually goes up to almost 100%, which makes it less likely that the price will go up.
Recent drops of the indicator below the 0.75 threshold show that Bitcoin is in the historical zone where bears and bulls change places.
Bitcoin’s price is currently hovering around $19.1K, down 4% in the last seven days. The cryptocurrency has lost 10% of its value in the last month.
The chart below depicts the BTC price trend over the last seven days.