Overview: According to analysts at blockchain firm Glassnode, Bitcoin (BTC) has surged past the $50,000 mark, marking a significant milestone last witnessed in December 2021. Remarkably, Glassnode reports that only 13% of the total Bitcoin supply is currently held at a loss, indicating a shift in market sentiment.
Analysis by Glassnode: Glassnode’s data reveals that approximately 87% of Bitcoin was acquired below the $48,000 threshold, with a notable concentration of short-term holders (holding for less than 155 days) clustered between $40,000 and $45,000. Conversely, long-term holders, constituting those holding for more than 155 days, account for the remaining 13% of the supply held at a loss.
The volume of long-term holder supply held in loss stands at around 777,000 BTC, with this figure “trending towards the zero bound” as Bitcoin prices soar. Glassnode points out that only 6.5% of the aggregate long-term holder supply is currently held in loss, reflecting changing market conditions.
Market Sentiment and Fear/Greed Index: The surge in Bitcoin’s price coincides with a notable shift in sentiment within the crypto community, as indicated by the Fear and Greed index. Recently, the index reached 79 out of 100 points, a level not seen since Bitcoin’s all-time high in November 2021. This surge in sentiment is considered “extremely high,” particularly in comparison to previous levels of around 52 points in mid-October 2023.
Implications: Glassnode suggests that previous instances where the long-term holder cohort held a similar volume of coins in loss corresponded with early bull market conditions, indicating potential positive market dynamics ahead. The shrinking proportion of Bitcoin held at a loss reflects the growing confidence among investors and may signal further price appreciation in the cryptocurrency.
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