Bitcoin (BTC) has experienced a remarkable surge, with its price increasing by over 200% in the past year, reaching a new record high of over $73,000 on March 13. This surge has led to a sense of euphoria among investors, as market intelligence firm Glassnode notes a shift in sentiment from long-term holders to new investors.
Glassnode’s recent report, “The Week Onchain,” highlights that Bitcoin’s surpassing of the previous all-time high of $69,000 in November 2021 marks the fourth new cycle all-time high in its history. Analyst Checkmate suggests that Bitcoin’s rally above $72,000 has propelled the market into the “Euphoria Zone,” which typically accompanies new all-time highs.
This sentiment is further supported by data from Alternative, which indicates that market sentiments and emotions are currently in the “extreme greed zone” at a level of 81. In this zone, investors tend to become greedy as the market rises, leading to a fear of missing out (FOMO) among speculators entering the market.
Glassnode also observes a shift in investor behavior patterns, specifically in the balance between long-term holders and speculators. Historically, moments like this have resulted in wealth being transferred from older investors to younger ones.
The data from Glassnode shows that investors who acquired BTC at lower prices in the past have accelerated their distribution pressure as Bitcoin reaches new all-time highs. This suggests a net expenditure by long-term investors who have held their coins for at least three months.
Additionally, Glassnode reports a 54% increase in the number of new Bitcoin wallets over the span of one month, corresponding to BTC’s 58% gains during the same period.
Furthermore, Glassnode identifies an increase in short-term supply holders by “+810k BTC” since November 2023, which is attributed to 660k BTC transferred from long-term holders and 150k BTC withdrawn from monitored exchange balances. Conversely, long-term holder supply has declined by -660k BTC during the same period.
The surge in Bitcoin’s price has led to profit-taking by long-term holders, balanced by an influx of demand from short-term holders. This is reflected in the increased “Realized Profit” metric, which provides insights into capital inflows, demand strength, and network profitability.
According to Glassnode, the spike in the realized profit metric indicates the start of the “Euphoria” phase, similar to what was observed during the 2017 and 2021 bull runs.
Cryptoslate analyst James Van Straten notes that accumulation is slightly outpacing issuance due to consistent profit-taking from both short and long-term holders, totaling $4 billion on March 11.
It is important to note that this article does not provide investment advice or recommendations. Readers are encouraged to conduct their own research before making any investment or trading decisions.