Bitcoin’s short-term holders have recently found it challenging to lock in profits, amidst indications of a potential peak in market supply ownership.
Key highlights:
- The NUPL metric for Bitcoin suggests a transition from ‘optimism’ to ’euphoria,’ signaling potential market highs.
- More of the Bitcoin realized cap is being held by short-term investors.
- New investors are being pressured by BTC’s price action, which is notably stagnant.
According to new analyses, Bitcoin (BTC) may currently be approaching its ‘final expansion’ toward a peak price of $112,500 despite recent fluctuations. On Wednesday, on-chain analytics service CryptoQuant shared in their Quicktake blog that Bitcoin’s historical price behavior appears to be repeating.
Bitcoin NUPL Indicates ‘Shift to Euphoria’
Bitcoin appears to be approaching a new cycle high as the dynamics between long-term and short-term holders of Bitcoin shift.
CryptoQuant’s data shows that the unrealized profit and loss (NUPL) ratio has moved into a zone that historically corresponds with significant market peaks.
“The NUPL currently sits at +0.52, a level that generally coincides with a transition from optimism to euphoria,” reported XWIN Research Japan.
“In earlier cycles, like those in 2017 and 2021, NUPL values over 0.5 indicated that a majority of investors were seeing profits, which encouraged speculative trading. As of now, about 97% of the circulating supply is experiencing profits, indicating strong market confidence but also implying limited upward potential without corrective movements.”
Bitcoin NUPL. Source: CryptoQuant
Speculative investors, or those holding for less than 155 days, now constitute a remarkable 44% of Bitcoin’s realized market capitalization. The realized cap represents the total value of the supply based on its last selling price. CryptoQuant notes that a high percentage of short-term holders suggests that newer investors are acquiring assets from older investors cashing in on profits, particularly larger investors, termed ‘whales.’
“In previous market cycles, this shift in ownership from long-term to short-term holders has aligned with the final stages of a bull market,” noted the report.
XWIN also mentioned that the current bullish phase of the market appears different this time. With major institutional investments, the influence of shifts in the realized cap may not be as pronounced.
“Nonetheless, the market feels distinct this time: ETF capital inflows, increased stablecoin availability, and broader institutional participation are mitigating selling pressure, leading to a more sustainable type of euphoria,” it stated.
“In summary, on-chain analytics suggest that Bitcoin is in an advanced speculative phase, underpinned by liquidity and continued influxes of capital. The primary indicator to monitor will be a reduction in short-term holder shares, signaling the beginning of a renewed accumulation phase by long-term holders.”
BTC Price Hovers Around STH Profit Levels
As previously reported, Bitcoin’s short-term holders are currently confronting challenges regarding profitability.
CryptoQuant indicates that the aggregated break-even point for Bitcoin as of Tuesday is $112,500, marking the current BTC price range as critical for overall profitability.
Bitcoin STH Realized Price. Source: CryptoQuant
The break-even price provides support during bullish market corrections, but a breach of this level can revert the market’s upward trajectory to resistance.
CryptoQuant’s data demonstrates that this volatility is presently occurring, as the spot price oscillates around the short-term holder break-even price trend.
Note: This article does not provide investment advice. All trades carry risks. Readers are encouraged to conduct thorough research before making decisions.
