Bitcoin Hits New Highs: On-Chain Metrics Point to Market Shift
By Caroline Bishop, Oct 02, 2024 15:57
Bitcoin (BTC) has surged to a new technical higher high, reaching $66k for the first time since its all-time high (ATH), as reported by Glassnode Insights. This milestone in price is supported by a range of on-chain metrics signaling a potential shift in the cryptocurrency market.
Cycle Navigation
The recent rally in Bitcoin’s price, pushing it towards $66k, indicates a significant shift in its structured downtrend. While there was a slight pullback to $60k earlier in the week, Bitcoin is currently trading at $61.7k. The cyclical price performance of Bitcoin reflects patterns seen in previous cycles, suggesting a familiar trajectory.
Deceptive Long-Term Holder Losses
On-chain analysis shows an increase in Long-Term Holder (LTH) coins held in loss, mainly due to large BTC volumes purchased near the $73k ATH maturing after 155 days. While the extent of unrealized losses is minimal, the proportion of total supply held at a loss by long-term holders has risen to 47.4%, indicating a phase of re-accumulation similar to past years.
Short-Term Holder Profitability Improves
Short-Term Holder (STH) profitability has shown improvement, with the STH Market Value to Realized Value (MVRV) metric back in positive territory. More than 62% of STH supply is now in a profitable position, easing financial pressure on this group.
Institutional Demand
Institutional demand for regulated Bitcoin exposure continues to rise, with assets under management in US Spot ETFs now totaling $58 billion, holding about 4.6% of the circulating Bitcoin supply. The average acquisition cost basis for these ETFs ranges from $54.9k to $59.1k, serving as a gauge for investors’ unrealized profit/loss.
The recent market rally and positive on-chain metrics hint at a potential shift in Bitcoin’s market structure. Both long-term and short-term holders are in a more profitable position, indicating reduced financial stress. The increasing demand from institutional investors further reinforces the positive sentiment surrounding Bitcoin.
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