Last week, Bitcoin (BTC) hit an all-time high above $109,000, as Republican billionaire Donald Trump became the 46th US president. However, Crypto Premier assets have declined since then, with the current market price below $105,000. Interestingly, current data on the profitability of Bitcoin holders supports the bullish structure of the market indicating little possibility of bullish sentiment.
Bitcoin holders receive huge profits: long-term investors by 70%
In the crypto market, the profitability of asset holders based on its entitlement price, i.e. the average cost of acquisition, is an important measure in predicting investor sentiment. in Quicktake post On Cryptoquant, an analyst with the username CrazzyBlockk provided insight into the profitability of bitcoin holders across three key levels.
The analyst states that data from Cryptoquant reveals that long-term BTC holders, i.e. investors older than 6 months, are currently seeing an average profit of 70%. Meanwhile, short-term holders, i.e. less than six months, see a moderate gain of 14.5%, reflecting their ability to accurately navigate recent market conditions.
Finally, despite the limited exposure, new investors, i.e. Bitcoin holders for less than one month, experience a small profit of 4.7%. Going by this data, no level of BTC holders are currently facing significant losses which reduces the potential for a broad market sell-off.
Most importantly, although the profitability percentages showed a slight decline relative to previous weeks and months, the BTC market is unlikely to slip into a bearish phase as long as short-term holders and new market entrants continue to record significant profits.
The importance of these levels of Bitcoin holders stems from the continuous distribution by long-term Bitcoin holders who are currently taking profits. For example, the famous crypto analyst Ali Martinez Reports Long-term Bitcoin holders dumped 75,000 BTC last week.
These large amounts of Bitcoin offloaded by long-term holders are then bought up by short-term holders and new investors, clearing any potential selling pressure in the market. Therefore, if these investors start taking losses, it could put strong downward pressure on BTC.
BTC price overview
At press time, Bitcoin is trading at $104,737 reflecting a 0.09% increase in the last day. Cryptocurrency Maiden fell by 0.46% on the weekly chart. However, the 8.71% price increase over the past 30 days reflects the current bullish structure of the BTC market.
In the wake of Donald Trump’s inauguration, BTC expectations are likely to rise given the new US President’s pro-profit statement. So far, President Trump’s administration appears to be off to a promising start, marked by the SEC’s rescission of the controversial SAB 121 and an executive order exploring the creation of a national digital asset stockpile.
Featured image from BitPerfect, chart from TradingView
