Bitcoin (BTC) Hits $66K High: On-Chain Metrics Show Market Shift

Bitcoin (BTC) has attained a new technical peak, with its price reaching the $66k level for the first time since its all-time high (ATH), according to Glassnode Insights. This upward movement is supported by critical on-chain metrics also posting new highs, marking a significant moment for the cryptocurrency landscape.

Cycle Navigation

The recent surge in Bitcoin’s price towards the $66k threshold last week marked the first technical higher high since June, indicating a possible shift in the established downtrend. Although there was a minor retreat to $60k earlier this week, Bitcoin is currently priced at $61.7k. The cyclical performance of Bitcoin since the low point in the bear market shows a remarkable resemblance to previous cycles, with the index positioned almost identically.

Misleading Long-Term Holder Losses

On-chain evaluations show an increase in the number of Long-Term Holder (LTH) bitcoins at a loss, mainly due to substantial volumes of BTC obtained near the $73k ATH being aged beyond the 155-day mark. While the extent of unrealized losses for these investors is relatively modest, the percentage of total supply held at a loss by long-term holders has ballooned, now representing 47.4% of coins in loss. This points to a re-accumulation phase akin to those in 2013, 2019, and 2021.

Improved Profitability for Short-Term Holders

The Short-Term Holder (STH) cohort has also experienced enhanced profitability. The STH Market Value to Realized Value (MVRV) metric, which reflects the average unrealized profit/loss for short-term holders, has returned to positive numbers. More than 62% of the STH supply is now profitable, indicating a reduction in financial strain on this group.

Rising Institutional Demand

Institutional interest in regulated Bitcoin exposure continues to expand. The total assets under management in US Spot ETFs have reached a market valuation of $58 billion, accounting for approximately 4.6% of the circulating Bitcoin supply. Significantly, the average acquisition cost basis for these ETFs varies between $54.9k and $59.1k, providing a psychological benchmark for investors based on their unrealized profit/loss.

In conclusion, the recent market surge and favorable on-chain metrics suggest a potential shift in Bitcoin’s market structure. Both long-term and short-term holders seem to be in a more advantageous position compared to a few weeks ago, facing reduced financial stress. The strong demand from institutional investors further highlights the optimistic sentiment surrounding Bitcoin.

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