During the previous week, Bitcoin (BTC) achieved a record peak surpassing $109,000 as Billionaire Republican Donald Trump was inaugurated as the 46th President of the United States. Nevertheless, the leading cryptocurrency has since decreased, with its present market value dropping below $105,000. Notably, recent statistics on the profitability of Bitcoin holders support the optimistic outlook of the market, suggesting minimal risk for pessimistic sentiment.
Bitcoin Holders Garner Significant Gains: Long-Term Investors Up 70%
Within the cryptocurrency market, the profitability of an asset’s holders based on their realized price, which is the average acquisition cost, serves as a vital indicator for forecasting investor sentiment. In a Quicktake update on CryptoQuant, an analyst known by the username Crazzyblockk has offered insights into the profitability of Bitcoin holders across three primary categories.
The analyst indicates that information from CryptoQuant shows that BTC long-term holders, that is, those who have held for over 6 months, are currently experiencing an average profit of 70%. In contrast, short-term holders, who have held for less than six months, are realizing a modest profit of 14.5%, which highlights their ability to effectively navigate the present market conditions.
Lastly, despite limited involvement, new investors, or those holding Bitcoin for under 1 month, are enjoying a slight profit of 4.7%. Based on this data, no segment of BTC holders is presently encountering significant losses, thereby reducing the likelihood of a widespread market sell-off.
Crucially, although profitability percentages have shown a slight decrease compared to previous weeks and months, the BTC market is unlikely to enter a bearish trend as long as short-term holders and new market participants continue to experience substantial profits.
The significance of these categories of Bitcoin holders arises from the ongoing distribution by long-term holders, who are currently realizing profits. For instance, well-known crypto analyst Ali Martinez notes that Bitcoin long-term holders have sold off 75,000 BTC over the past week.
These large quantities of Bitcoin that long-term holders have offloaded are being acquired by short-term holders and new investors, absorbing any potential selling pressure in the market. Thus, if these investors start to experience losses, it could initiate a strong bearish momentum on BTC.
BTC Price Summary
As of the time of writing, Bitcoin is trading at $104,737, reflecting a 0.09% increase over the past day. The original cryptocurrency has decreased by 0.46% on the weekly chart. However, a price increase of 8.71% over the last 30 days illustrates the current bullish framework of the BTC market.
In light of Donald Trump’s inauguration, expectations for BTC are likely to escalate, given the new President’s pro-crypto platform. So far, President Trump’s administration appears to be off to a favorable start, highlighted by the SEC’s revocation of the contentious SAB 121 and an executive order navigating the creation of a national digital asset reserve.
Featured image from bitperfect, chart from Tradingview
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