May 23, 2024
Bitcoin News

Bitcoin Long-Term Holders Sell as New Investors Enter the Market

An analysis report published on April 2 by Glassnode offers insight into the current spike in Bitcoin’s price, which has spurred existing holders to cash out profits while bringing a new wave of investors into the market. The report highlights Glassnode’s use of the Realized Cap statistic, which calculates the proportion of holders who make profits or losses depending on transaction prices.

Realized Cap Surpasses Previous Highs

The Realized Cap metric has hit an all-time high (ATH), indicating a significant milestone for the market. This metric, reflecting the total USD liquidity stored in the asset class, has reached a remarkable value of $540 billion and is witnessing unprecedented growth of over $79 billion monthly.

Source: Glassnode

Shifting Investor Behavior

Glassnode’s data reveals a notable shift in investor behavior, with approximately 44% of all BTC now held by addresses active for less than three months. This surge in newer investors typically signals a mid-stage bull market, indicating growing interest in Bitcoin among fresh participants.

Source: Glassnode

Market Volatility and Altcoin Trends

However, the analysis coincided with Bitcoin’s struggle to maintain its all-time high as markets experienced a downturn earlier in the week.

Bitcoin, which had reached a peak of $73,734 on March 14, saw a subsequent decline of about 17%. Altcoins, aside from select meme coins, have largely remained stagnant in this market cycle, with many experiencing downward movement. XRP fell by 2.3% to $0.576, and Dogecoin dropped by 2.7% to $0.180.

BTC 24-hour price chart. Source: CoinMarketCap

The current market dynamics underscore a complex interplay between profit-taking by long-term holders and the influx of new investors attracted by Bitcoin’s recent price surge. While volatility persists in the short term, the growing adoption and interest in cryptocurrencies suggest a promising outlook for the digital asset market in the long run.

Image from Flickr

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