Glassnode co-founders, Jan Happel and Yann Allemann, also known as Negentropic, are warning investors about a potential severe correction in the Bitcoin market following its historic breakthrough of $100,000. They point to the Bitcoin Fundamental Index (BFI) as a key metric showing signs of market weakness. The BFI evaluates various aspects of the Bitcoin market, such as wallet activity and transaction volume, and a decline in this index usually indicates an increased risk of a market correction.
In a recent update to their followers on the social media platform X, the co-founders highlighted the importance of monitoring the BFI as it has previously provided early warning signals of market peaks and corrections. Despite Bitcoin’s recent milestone, Happel and Allemann suggest that there may be cause for concern given the weakening BFI. They emphasize the need to remain vigilant and attentive to such indicators, as they can be crucial in guiding investment decisions during volatile market conditions.
Prior to Bitcoin surpassing the $100,000 resistance level, the analysts pointed to the net realized profit/loss metric as another key indicator of market sentiment. This metric tracks whether Bitcoin holders are selling at a profit or a loss, and it indicated that holders were holding out for higher price targets before considering taking profits. The reluctance of traders to sell at current levels suggests a consolidation phase in the market, with many investors expecting further gains as Bitcoin approaches key resistance levels.
As of the time of writing, Bitcoin is trading at $96,579, representing a 6.8% drop from its recent all-time high of $103,679. Despite this pullback, the market remains volatile and investors should exercise caution while monitoring key metrics like the BFI and net realized profit/loss. The co-founders of Glassnode continue to track these indicators closely and provide regular updates to their followers, urging them to stay informed and prepared for potential market fluctuations.
To stay updated on the latest developments in the crypto market and receive timely alerts, interested individuals can subscribe to email alerts from Glassnode. Additionally, followers can follow Glassnode on social media platforms such as X, Facebook, and Telegram to access real-time updates and analysis from industry experts. By staying informed and actively monitoring market indicators, investors can make more informed decisions and navigate the ever-changing landscape of the crypto market with confidence.
