Markets
Bitcoin metrics indicate the return of speculative activity in the cryptocurrency sector
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Bitcoin market dynamics are showing the first signs of renewed speculation in the cryptocurrency market reported by Glassnode. Long-Term Holders (LTH) are currently sitting on unrealized profits, with only a minuscule 0.03% in losses, signaling the start of a potential euphoric phase of the bull market.
Over the past two months, the sell-side risk ratio for both long- and short-term holders has balanced out, suggesting that the market has absorbed expected profits and losses within the current price range, setting the stage for possible significant future volatility.
A notable change occurred with the spending of long-dormant coins, which led to spikes in metrics such as Realized Cap, Spent Output Profit Ratio (SOPR), and Coindays Destroyed. However, using a size-adjusted variant of Realized Cap, Glassnode filtered out actual capital inflows into Bitcoin, which currently sits at an all-time high (ATH) valuation 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 into new demand. This pattern is consistent with previous cycles, where new demand ultimately accounts for more than 70% of the network’s richness.
Despite a slowdown in liquidity and speculative activity, the recent recovery to the $68,000 level has brought most short-term bond holders back into profit.
Additionally, market consolidation just below Bitcoin’s all-time high has created a significant cluster of short-term holding coins around the current spot price, highlighting substantial investment in this range and introducing the risk of heightened investor sensitivity to price fluctuations.
The recent pullback to $58,000 marked a 21% correction, the largest since FTX’s collapse, pushing 56% of short-term holders’ supply into a loss. However, the magnitude of unrealized losses is in line with typical bull 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, especially near peak prices.
The market is also anticipating the Mt.Gox distribution event, with the Trustee’s recent portfolio consolidation signaling preparations to return 141,000 BTC to creditors by October. Mark Karpeles, former CEO of Mt.Gox, confirmed that portfolio movements were part of this process.
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