The fluctuations in Bitcoin’s price over the past fortnight have underscored its inherent volatility, even in the face of ongoing institutional investments. The cryptocurrency saw a remarkable increase at the end of September, climbing from $53,500 to a peak of $66,000, only to retract to $61,000 in early October, highlighting its erratic behavior.
Notably, Bitcoin’s ascendance to $66,000 has triggered a shift in investment trends among the different holder groups. This shift indicates that the price correction following the rally may not be entirely negative for Bitcoin’s valuation. In fact, this development could lay the groundwork for a more robust long-term price perspective for Bitcoin.
Bitcoin’s Rejection At $66,000
Bitcoin’s recent surge past $66,000 marked its first higher high since June. This significant Bitcoin milestone was noted by on-chain analytics service Glassnode in a recent analysis. After establishing a higher low of $53,000 in September, Bitcoin moved above the August peak of $64,500. According to the report, this new higher high has influenced the profitability landscape for both short-term and long-term holders, with a notable increase in Bitcoin transitioning to long-term stash.
The recent upswing has resulted in many coins, which were acquired near the $73,780 all-time high, now being held for over 155 days. Consequently, many of these currently unprofitable coins are transitioning to long-term holder status. While only 6.54% of long-term holders are at a loss, they make up 47.4% of all coins that are in a deficit. Although this situation may seem concerning for these long-term holders right now, Glassnode observes that such patterns are typical during phases of re-accumulation, as witnessed in 2013, 2019, and 2021. Historical data suggests that these phases often precede price increases.
Conversely, the profitability among short-term holders has seen a remarkable enhancement. According to Glassnode data, a considerable amount of coins within the short-term holder category have a cost basis ranging from $53,000 to $66,000. The recent surge has consequently elevated the profitability of the short-term holder supply to over 62%. Moreover, profit-taking volumes have surged to 14.17 times the loss-taking volumes. This alleviates the financial burden on short-term holders, incentivizing many to maintain their positions.
What’s Next For Bitcoin?
In spite of Bitcoin’s recent downturn at $66,000, the cryptocurrency currently stands in a stronger and more advantageous position for investors overall compared to a month prior. Additionally, the rejection at this price level has provided investors, particularly long-term holders, a fresh opportunity to bolster their holdings.
As of this writing, Bitcoin is priced at $61,200.
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