Last week, Bitcoin (BTC) hit an all-time high above $109,000, as Republican billionaire Donald Trump became the 46th president of the United States. However, the main cryptocurrency asset has since fallen, with the current market price below $105,000. Interestingly, current data on the profitability of Bitcoin holders supports the bullish structure of the market indicating little possibility of bearish sentiment.
Bitcoin Holders Reap Huge Profits: Long-Term Investors Up 70%
In the cryptocurrency market, the profitability of asset holders based on the realized price, i.e. the average acquisition cost, is an important measure in predicting investor sentiment. In a Quick post On CryptoQuant, an analyst with the username Crazzyblockk provided insight into the profitability of Bitcoin holders across three key levels.
The analyst states that data from CryptoQuant reveals that long-term BTC holders, i.e. investors for more than 6 months, are currently making an average profit of 70%. Meanwhile, short-term bond holders, i.e. those holding them for less than six months, are seeing moderate gains of 14.5%, reflecting their ability to accurately navigate recent market conditions.
Finally, despite the limited exposure, new investors, i.e. holders of Bitcoin for less than one month, make a small profit of 4.7%. Based on this data, no category of Bitcoin holders is currently facing significant losses, reducing the likelihood of a widespread market sell-off.
Most importantly, while profitability ratios showed a slight decline compared to previous weeks and months, the Bitcoin market is unlikely to slide into a bearish phase as long as short-term holders and new market entrants continue to record significant profits.
The importance of these levels of Bitcoin holders stems from the continuous distribution by long-term Bitcoin holders who are currently receiving profits. For example, the famous cryptocurrency analyst Ali Martinez Reports Long-term Bitcoin holders lost 75,000 BTC in the past week.
These large amounts of Bitcoin offloaded by long-term holders are then purchased by short-term holders and new investors, eliminating the impact of any potential selling pressure in the market. Therefore, if these investors start making losses, it could put strong downward pressure on Bitcoin.
Bitcoin price overview
At press time, Bitcoin is trading at $104,737, reflecting a 0.09% gain in the last day. The first cryptocurrency fell by 0.46% on the weekly chart. However, the 8.71% price rise over the past 30 days reflects the current bullish structure of the Bitcoin market.
After the inauguration of Donald Trump, expectations for Bitcoin are likely to rise given the new US President’s pro-crypto statement. So far, President Trump’s administration appears to be off to a promising start, marked by the SEC’s rescission of the controversial SAB 121 and an executive order exploring the creation of a national stockpile of digital assets.
Featured image from bitperfect, chart from Tradingview
Comments are closed, but trackbacks and pingbacks are open.