- Bitcoin traded between US$60-62k as memecoins rallied, indicating a potential market bottom.
- Glassnode reports long-term holders are resuming purchases, signalling a possible price rally.
- The Bitcoin NUPL metric entered the euphoria phase faster than Ethereum, showing stronger investor confidence.
Bitcoin has been trading in a range between US$60-62k (AU$90-93k) for the past week, despite many memecoins rallying. But according to data from Glassnode, the bottom may be in.
The analysts revealed that long-term holders – or HODLers – are actually resuming their buying activities which could mean a price rally is imminent. These long-term holders have sold approx. one million BTC since late 2023 after taking profits at new all-time highs.
Related: Bitcoin Defies Inflation: Price Steady Amid PPI Spike and Big Institutional Moves
NUPL Metric Enters Euphoria Phase
Glassnode added that “amidst the hype and market rally surrounding approval of the spot Bitcoin ETFs, the unrealized profit of Bitcoin holders expanded considerably faster than that of Ethereum investors”.
They stated that this surge in profits led to a significant rise in the Bitcoin Net Unrealised Profit/Loss (NUPL) metric. The NUPL metric, which measures the overall profit or loss of Bitcoin holders, crossed the 0.5 mark, indicating a shift into the euphoria phase.
This phase, characterised by heightened investor optimism and significant unrealised gains, was reached three months before the equivalent metric for Ethereum. This disparity highlights Bitcoin’s stronger performance and greater investor confidence during this period compared to Ethereum, Glassnode concluded.
Long-Term Holders Profitable, While Short-Term Holders Sell at Loss
In a recent study Glassnode was able to “isolate points of severe unrealized loss, and investor capitulation”.
In bull markets, long-term investors typically remain highly profitable, while short-term holders are the primary sources of realised losses. This trend provides insights into market inflection points during sell-offs.
To gauge investor responses to market downturns, the analysis employs three key on-chain metrics: the Market Value to Realised Value (MVRV) Ratio, the Spent Output Profit Ratio (SOPR), and Realised Loss.
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Glassnode said that these metrics help identify points of micro-capitulation and local market lows, profiling seller exhaustion across various investor timeframes, thereby providing a valuable tool for navigating volatile crypto markets.
If you would like deeper insights into the crypto market, check out our guide on local Aussie education platforms.
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