Stack Funds, the crypto index fund provider, has already gone to label the pullback in the BTC market as a “healthy” correction, claiming that it was needed before Bitcoin could continue its upwards trend.
Predicting A Looming “Euphoria” Stage
Earlier this week, bullish sentiments were at their highest when Bitcoin managed to break through the $19,000 mark, having posted seven weeks of consecutive gains prior to this. Stack Funds, however, highlighted that Bitcoin had been overbought since October, which only supported the need for a correction further.
As justification, the firm took a closer look at the market psychology and its metrics for Bitcoin. According to the index fund provider, market participants are in the “belief” stage, currently. According to Stack Funds, however, this sentiment will move into the “euphoria’ stage of the market sentiment in due time.
Glassnode Sentiments Prove Looming Bull Market
Stack Funds cite the data from Glassnode, a crypto data provider, in order to support its claims. In particular, the crypto fund provider cites the net unrealized profit/loss (NUPL) provided by Glassnode. This compares the current price of a BTC with the price of each coin when it was last moved on-chain.
Historically speaking, the market tops can be reliably seen the moment more than 95% of people have moved into profit. Through the breakdown of various market states, Glassnode is capable of breaking down the overarching macrocycles of the world’s first cryptocurrency.
This “belief” state currently held by the Bitcoin market, which it just moved into this month, has been held for over a year back in 2017 during that great bull market. This market saw Bitcoin rise by an incredible 2,250%, going from $850 to $20,000.
17% Drop Could Have Been Worse
Comparing the data from 2017’s bull market to the current state of Bitcoin, the fund explains that a quarter of this price increase witnessed during that year will see Bitcoin smash past the $86,000 mark by next year, when the space will enter the “Euphoria” stage.
Many other analysts have come out and speculated about this, as well. They are convinced that this market correction had already bottomed out. Mati Greenspan, the founder of Quantum Economics, went as far as to call a 17% pullback rather tame considering the stage of the cycle Bitcoin’s market.
Lark Davis, a prominent crypto personality, highlighted how it didn’t even take long for the correction to stop at its current price, which is around $16,500. As such, he’s unsure if this dip will stay where it was or go even lower.