A new analysis from Glassnode reveals a surprising statistic: 87% of Bitcoins in circulation are in profit. This data, which contrasts with the stagnation of BTC prices in recent weeks, offers an intriguing insight into the current state of the market and its prospects. Why this relative stability and what could be the implications for the future of this market-leading crypto?
Bitcoin in profit despite price stagnation
According to a report by Glassnode, 87% of Bitcoin supply is currently in profit. This situation continues despite the restricted price movements of the crypto in recent weeks. At the time of writing, Bitcoin is trading at $65,436, moving within a horizontal channel with resistance at $71,656 and support at $64,825. “ BTC prices are consolidating within a well-established range. Investors remain in a favorable position overall, with more than 87% of the circulating supply in profit, with a cost price lower than the spot price“, noted Glassnode.
The Market Value to Realized Value (MVRV) ratio of Bitcoin shows that the average BTC in circulation holds an unrealized profit of over 120%. However, despite this profitability, the volume of coins processed and transferred on the Bitcoin network has decreased significantly since the all-time high in March. Glassnode notes that this drop “ highlights reduced appetite for speculation and increased indecision in the market“.
The decline in trade flows and future implications
The BTC price consolidation has also led to a decline in Bitcoin exchange flows. Glassnode reports that short-term holders (STHs) are currently sending approximately 17,400 BTC (valued at $1.13 billion at current market prices) to exchanges each day, a 68% decrease from the 55,000 BTC sent by this group of investors when the coin reached an all-time high of $73,000 in March.
When it comes to long-term holders (LTHs), their sendings to exchanges are relatively low, with only around 1,000 BTC/day currently. “ LTHs are sending less than 0.006% of their total holdings to exchanges, suggesting that this group has reached equilibrium and that higher or lower prices are needed to spur further action“, notes Glassnode.
Bitcoin sent to exchanges generates an average profit of around $5,500, which has prompted some investors to sell for profit. As the market anticipates a rally towards the all-time high of $73,750, there is enough demand to absorb the selling pressure, but not enough to drive the price of BTC higher. A dynamic which indicates a certain indecision among investors…
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