Markets
Bitcoin Metrics Indicate Return of Speculative Activity in Crypto
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Bitcoin market dynamics show early signs of a resumption of speculation in the crypto market, as reported by Glassnode. Long-term holders (LTH) are currently sitting on unrealized profits, with only a miniscule 0.03% in losses, signaling the start of a potential euphoric phase of a bull market.
Over the past two months, the sell-side risk ratio for long- and short-term holders has balanced, suggesting that the market has absorbed expected profits and losses within the current price range, opening the path to possible significant future volatility.
A notable shift occurred with the spending of long-dormant coins, leading to spikes in metrics such as cap realized, spent output profit ratio (SOPR), and days destroyed. However, using a variation of the entity-adjusted realized cap, Glassnode filtered out actual capital inflows into Bitcoin, which currently stands at an all-time high valuation (ATH) of $580 billion.
The “Realized Cap HODL Waves” metric reveals that 41% of the network’s wealth is held by coins less than three months old, indicating a transfer of wealth to new demand. This trend is consistent with previous cycles, where new demand ultimately represents more than 70% of network wealth.
Despite a slowdown in liquidity and speculative activity, the recent rise to the $68,000 level has allowed most short-term holders to return to profit.
Additionally, market consolidation just below Bitcoin’s all-time high has created a large group of short-term holders’ coins around the current spot price, highlighting substantial investments in this range and introducing the risk of a increased sensitivity of investors to price fluctuations.
The recent pullback to $58,000 marked a 21% correction, the largest since the FTX collapse, resulting in a 56% loss in short-term holder supply. Still, the scale of unrealized losses matches typical bullish market corrections, suggesting that stabilization is on the horizon.
Long-term holders continue to show confidence, with only 4,900 BTC held at a loss, representing just 0.03% of their supply. This contrasts with short-term holders, who bear the brunt of market losses, particularly near peak prices.
The market is also anticipating the Mt.Gox distribution event, with the trustee’s recent portfolio consolidation signaling preparations for the return of 141,000 BTC to creditors by October. Mark Karpeles, the former CEO of Mt.Gox, confirmed that portfolio moves were part of this process.
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