The co-founders of the crypto analytics platform Glassnode are raising concerns about a potential market correction for Bitcoin (BTC) following its recent breakthrough above $100,000. Jan Happel and Yann Allemann, known as Negentropic, took to social media to share their insights with their followers on X.
According to the duo, the Bitcoin Fundamental Index (BFI) is showing signs of weakening, indicating a potential downturn in the market. The BFI evaluates various aspects of the Bitcoin market, such as wallet activity and transaction volume, and a decline in this metric typically suggests an increased risk of a market correction.
Negentropic issued a warning to their followers, highlighting the importance of monitoring the BFI for early warning signals. They referenced a previous market peak in Q1 of this year, where the BFI accurately predicted a significant correction. Despite the current weakening of the BFI, the co-founders believe that the bull run still has momentum.
Prior to Bitcoin surpassing $100,000, Negentropic also pointed to the net realized profit/loss metric, which indicated that traders were holding out for higher price targets before taking profits. This reluctance to sell at current levels suggests that traders are anticipating further gains once Bitcoin breaks key resistance levels.
At the time of writing, Bitcoin is trading at $96,579, down 6.8% from its recent all-time high of $103,679. As the market continues to evolve, it will be essential to closely monitor indicators like the BFI and net realized profit/loss to gauge the potential for a market correction.
For the latest updates and insights on the crypto market, be sure to subscribe to receive email alerts directly to your inbox. Stay informed about price action and follow The Daily Hodl on X, Facebook, and Telegram. Don’t miss out on the latest news and analysis in the world of cryptocurrency.