BTC Price Rises, All Bitcoin Holders in Profit
BTC Price Rises, All Bitcoin Holders in Profit
Long-term Bitcoin holders, or HODLers, who previously faced unrealized losses are now seeing profits as Bitcoin's price soared to $71,000 on June 5.
According to a report from Glassnode, the majority of Bitcoin investors are currently holding unrealized gains, marking the first indication of renewed interest from crypto speculators after two months of stagnant trading.
Previously, around 4,900 BTC, or approximately 0.03% of the long-term Bitcoin supply (those held for over 155 days), were still at a loss when Bitcoin hit $68,000 on June 4.
This group of investors largely consists of those who bought Bitcoin during the 2021 bull market cycle when Bitcoin reached its previous all-time high (ATH) of $69,000 in November 2021.
Glassnode noted that during the lowest points of a bear market, long-term investors tend to bear most of the unrealized losses as speculators exit the market. Conversely, during the euphoric phases of a bull market, the contribution of long-term investors to the supply in loss tends to approach zero.
Glassnode predicts that if Bitcoin remains above $69,000 for the next few months, all long-term Bitcoin holders will continue to see profits.
Short-Term Investor Losses
On the other hand, short-term Bitcoin investors (those holding BTC for less than 155 days) are currently bearing most of the unrealized losses. This is especially true for those who bought Bitcoin in March before it reached its all-time high (ATH) of $73,750 on March 14.
Glassnode's report indicates that short-term Bitcoin investors are bearing the brunt of market losses, a condition typically seen during bull market corrections from a new ATH. When Bitcoin's price hit a recent low of $58,000, about 56% or approximately 1.9 million BTC of the short-term investor supply turned into a loss position.
However, a large portion of the supply is technically below the purchase price, with unrealized losses remaining consistent with typical bull market corrections and expected to diminish as the market stabilizes.
"Both long-term and short-term Bitcoin holders have undergone a reset in the sell-side risk ratio, indicating that a new balance has been found. This suggests that the [Bitcoin] market is ready to move, and short-term volatility expectations will increase," said Glassnode.
Bitcoin Reaches $71,000
As of Thursday (June 6, 2024), Bitcoin's price is at $71,070. The largest cryptocurrency by market capitalization has been rallying since last week, with a 4% increase on a weekly basis.
In the early hours of Thursday, Bitcoin's price briefly reached $71,735, marking a new high for the month.
Conclusion
The recent surge in Bitcoin's price to $71,000 has turned unrealized losses into profits for long-term Bitcoin holders, reflecting renewed interest from crypto speculators. Glassnode's analysis shows that while long-term holders now enjoy gains, short-term investors who purchased Bitcoin at higher prices earlier this year are currently experiencing losses. Despite these losses, the market appears to be stabilizing, suggesting potential for future gains as both long-term and short-term holders find a new balance. The sustained rise in Bitcoin's price indicates a robust recovery, with expectations of increased volatility in the near term. As Bitcoin continues to perform well, it reaffirms its position as a significant player in the cryptocurrency market.
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*Disclaimer:
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