New data from the blockchain analytics provider Glassnode indicates that almost all of the current Bitcoin
While this is certainly encouraging news, the analysts at the firm also point out some elements that might introduce potential risks in the near future.
The latest analysis reveals that approximately 97% of the total Bitcoin in circulation is presently valued higher than its original purchase price. This high level of profitability is often observed closer to the peak of bullish market trends. This can lead to a slowdown in momentum as some investors choose to sell off portions of their holdings to lock in profits.
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However, instead of significant sell-offs, the information gathered by Glassnode points towards a gradual and carefully planned extraction of profit, suggesting a more secure marketplace.
Their data indicates that many investors are systematically reallocating their assets within their portfolios, rather than impulsively selling everything. This trend often coincides with healthy market patterns, where there is enough continued interest in Bitcoin to sustain prices even when some participants are cashing out on their gains.
One analytical tool used by Glassnode, known as a cost basis heatmap, suggests a moderate support level for Bitcoin prices between $120,000 and $121,000, with an even stronger zone of interest detected near $117,000. It’s at this lower price range where substantial volumes of Bitcoin, around 190,000 BTC to be exact, were previously exchanged.
Should Bitcoin’s price decrease back to these levels, it could very likely encourage new purchases, especially from investors who are looking to protect the profits they’ve recently accrued.
On October 8th, Cosmo Jiang from Pantera Capital discussed why many investors have yet to invest in Bitcoin despite its recent price surges. Want to know more? Read the full story.