Bitcoin, $78,000 is just around the corner...Glassnode warns "Be cautious"

▲ Bitcoin (BTC)/AI generated image

Bitcoin (BTC) is targeting $78,000, fueling bullish sentiment, but on-chain data analysis has raised a red flag, warning investors to approach with caution.

According to crypto media outlet NewsBTC on April 17 (local time), on-chain analytics platform Glassnode recently raised the possibility of a massive profit-taking sell-off amid Bitcoin's rapid price surge. While Bitcoin is gaining upward momentum as it approaches its previous all-time high, the analysis suggests caution against an overheated market. Glassnode specifically highlighted that the Market Value to Realized Value (MVRV) indicator has reached near historical highs.

The key driver of the uptrend is the relentless buying pressure from institutions. Continuous capital inflow through Bitcoin spot ETFs has firmly supported the price floor. However, as the price approaches the psychological resistance level of $78,000, selling pressure from those seeking short-term profits is expected to intensify. Glassnode diagnosed, "The proportion of unrealized profits among current market participants is very high," and "It's a vulnerable structure where even a small negative event could trigger a sharp price correction."

The movements of long-term holders are also unusual. There are signs that whales, who have held Bitcoin for a long time, are gradually depositing their holdings into exchanges. This is interpreted as a strategic move to lock in profits as the price rises. For Bitcoin to break $78,000 and set a new all-time high, strong new liquidity is essential to absorb such a large volume of selling pressure.

Market experts advised preparing for short-term volatility while still maintaining a positive long-term outlook for Bitcoin. In particular, the sharp increase in open interest in the futures market, leading to a higher leverage ratio, is cited as a risk factor. If the price moves unexpectedly, a cascade of forced liquidations could occur, exacerbating the decline. Glassnode warned against 'FOMO buying', stating, "Corrections are an essential process even in a bull market."

In conclusion, Bitcoin stands at a critical juncture, approaching the historic milestone of $78,000. While institutional capital and individual FOMO sentiment are driving the uptrend, internal overheating signals cannot be ignored. Market tension is rising over whether Bitcoin will overcome this hurdle and start a true rally, or experience a temporary retreat.

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