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Bitcoin has hit a new milestone, with almost 84 percent of its circulating supply currently in profit, a level it has not reached for two years.
The world’s first-ever crypto asset has maintained a price range between $37,000 and $38,000. The recent rise in its value brought over 16.366 million BTC, accounting for 83.6 percent of the circulating supply, into a profitable state. This level was last observed in November 2021 after the crypto market had pulled back from its all-time high, as reported by on-chain marketing intelligence firm Glassnode.
“With market trading reaching year-to-date highs, more than 83.6% of Bitcoin supply is currently in the black, the highest level since November 2021 (near all-time highs),” Glassnode said.
However, Glassnode noted that although a significant amount of Bitcoin is profitable, the unrealized profits stored in these coins are relatively small and have not motivated long-term holders to sell and secure their profits.
“The extent of unrealized profits held by investors has so far not been enough to incentivize long-term holders to sell, keeping total supply relatively tight,” it said.
The recent Bitcoin rally displayed a stronger accumulation trend compared to earlier rallies this year. This robust pattern contributed to a 39 percent price surge in the last 30 days.
BTC supply reaching 83 percent of the total circulating supply signals the market’s entry into the “early stages of a bull market” or the “euphoric phase,” Glassnode said in a report.
The report highlighted a growing difference in the amount of Bitcoin held by long-term and short-term holders. Long-term holders have reached a peak supply of 14.9 million BTC since November 2022, while short-term holder supply hit an all-time low of 2.3 million BTC.
“This dynamic suggests that existing holders are increasingly reluctant to part with their holdings, as they have historically waited for the market to break out to a new all-time high price. This can be explained by investors requiring higher unrealized profits (size) before increasing their selling pressure,” the report explained.
According to CoinMarketCap, BTC’s circulating supply is at 19.55 million BTC. Its value is currently rising at a 0.18 percent rate, reaching a market cap of $737,553,736,800.
Bitfinex analysts have revealed that approximately 70 percent of the total circulating supply of Bitcoin has not moved in the past year.
“This is providing a source of upward pressure as increasing demand chases limited supply,” the analysts said.
Bitfinex analysts noticed different behavior between the current actions of long-term holders and those seen in previous cycles.
“In the current cycle, there have been fewer dips and oscillations in long-term holder supply due to spending, indicating a trend of continuously increasing supply. This suggests a degree of supply tightness in the bitcoin market regardless of long-term holder profitability on a pretty decent scale,” the analysts said.
They concluded that current conditions suggest the market is in the initial phases of a bull market.
“Bitcoin continues to show strength while still in a range for the time being,” they said.
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