Bitcoin recovered to $66,000, marking its first new high since the all-time high of $73,835 set in March. Despite the price of Bitcoin falling below $60,000 this week, Glassnode said several on-chain indicators suggest the market is “approaching a phase change.”
This recovery, which saw Bitcoin (BTC) rise 26.5% from a low of $52,550 on September 6 to a three-month high of $66,508 on September 27, shows striking similarities to previous cycles, with the price trading at . Almost the same position.
“Both the 2015-2016 (blue line) and 2019-20 (green) periods traded in an eerily similar manner to the recovery in 2023-24 (black),” Glassnode analysts wrote in an Oct. 2 report.
“These price movements provide the first indication that a structured downtrend is approaching a phase change.”
Bitcoin price performance since cycle lows. Source: Glassnode
An in-depth analysis of on-chain metrics shows that the number of coins maturing to long-term holder (LTH) status is increasing.
To assess the balance between these cohorts, we analyzed the long/short holder supply ratio and found that this ratio has reached its highest level since June 2021, according to Glassnode analysis.
“This suggests that HODLing continues to be the dominant behavior of Bitcoin investors.”
Bitcoin Long/Short Holder Supply Ratio Ratio Change. Source: Glassnode
This means that LTH is increasing its position, which has historically been a bullish sign. The accumulation of long-term investors often indicates confidence in a cryptocurrency’s future growth potential.
The report also highlighted that a large amount of Bitcoin, near its all-time high of $73,835, has expired over the 155-day threshold, increasing the supply held by LTH as unrealized losses.
“However, the size of unrealized losses held by these investors remains small, suggesting minimal financial pressure on their portfolios.”
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Perhaps the most important insight of the report comes from its analysis of the Short-Term Holder (STH) Market Value to Realized Value (MVRV) metric. Glassnode analysts found that the group’s profitability had “clearly improved” during the recent rally.
To put this into context, Glassnode analysts examined the percentage of STH supply maintained by profits and found that over 62% of the current supply remains in a profitable position, providing relief to buyers who recently acquired the coin.
“The recovery has also brought the profit supply rate closer to the long-term average for this indicator, which is a notable rebound.”
Bitcoin STH supply to revenue ratio. Source: Glassnode
These on-chain metrics suggest the average Bitcoin investor is in a “better and more profitable position” compared to just a few weeks ago, which Glassnode analysts say “makes this an exciting moment” for BTC. I concluded.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.