A new report by on-chain analytics firm Glassnode analyzes the state of the Bitcoin BTC/USD market, concluding that the long-term holder cohort has entered its distribution phase.
What Happened: The report highlights that new capital is being injected into the asset class, driving up the realized cap of holders — the cumulative dollar liquidity “stored” in the asset class — to an all-time high of $540 billion. This compares to the previous all-time high of just below $470 billion from May 2022.
Over 44% of Bitcoin’s network wealth is now controlled by coins that are less than three months old, reflecting the significant role of new capital in the market.
Both long-term and short-term holders are realizing profits, but there is a notable shift with profit dominance moving towards long-term holders.
Despite Bitcoin’s consolidation below the $73,000 all-time high, liquidity remains abundant, fuelled by continuous capital inflows and profit-taking strategies of both holder groups.
A distinct phase shift in investor behavior is evident as Bitcoin reaches new price peaks, with accelerated distribution and profit-taking by long-term holders in response to the new demand at elevated prices.
Still, the market remains in a predominantly profit-driven regime, with short-term holder losses spiking during market corrections, indicating panic selling among newer investors.
The report concludes that these developments indicate a maturing market which is increasingly integrating into the broader financial ecosystem, requiring investors and traders to adapt their strategies accordingly.
Read Also: Bitcoin In ‘The Danger Zone,’ Says Trader Who Targets 22% Drawdown
Why It Matters: Bitcoin is undergoing a period of consolidation after recording its highest monthly close ever in March. This marked the first time ever Bitcoin recorded seven straight monthly closes in the green,
Historical data shows April tends to be a favorable month for Bitcoin, with an average return of +12% over the last decade.
Bullish predictions from traders at the start of March have materialized, with veteran prop trader Peter Brandt calling Bitcoin’s record monthly dollar gain in February a “starting signal.” Other traders, such as Fred Krueger, had correctly predicted Bitcoin to hit an all-time high before the Bitcoin halving in April.
It remains to be seen whether the rally will continue in the near future or if Bitcoin enters a period of consolidation, as spot Bitcoin ETF inflows cool down.
What's Next: Benzinga's upcoming Future of Digital Assets conference on Nov. 19 promises to be a valuable platform for in-depth discussions on Bitcoin's future and the broader cryptocurrency landscape.
Photo: Pixabay
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