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Bitcoin‘s bullish cycle is advanced, but still far from over.
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Old investors are taking profits to make way for new entrants.
According to the recent movements of bitcoin (BTC) investors, the current bullish cycle is still strong to continue. This is according to a new report from the research firm Glassnode published on December 18.
With bitcoin trading mostly above $100,000 (USD) so far in December, long-term investors bitcoin They are taking advantage of the opportunity to sell. This has resulted in profit taking of unprecedented levels above USD 2.1 billion, sample Glassnode.
Much of these profit-taking volumes originate from coins that were acquired over 6 to 12 months. This happens while the oldest ones remain relatively inactive. Thus, investors with more time in the market are still reluctant to sell, despite the price increase.
Meanwhile, the percentage of bitcoin in the hands of new investors has increased. This reflects solid demand that largely offsets the significant selling pressure from long-term investors, which is shown below.
BTC sales in long-term investor profits. Source: Glassnode.
“This indicates a shift in wealth distribution away from mature investors, which typically occurs during the later stages of bull markets,” Glassnode warns.
However, he clarifies that the proportion of bitcoin in new hands has not yet reached the peak heights experienced at the end of bull cycles. “The interpretation here is that the market may not have reached the level of euphoric fervor and speculator saturation seen in previous cycles,” he explains.
The dominance of new bitcoin investors is not yet as it is at the end of each bull cycle
As seen in the following graph, the realized capitalization of BTC moved less than three months ago rose to 48%. On the other hand, at the end of the last two bullish cycles, this metric reached values over 70%. Therefore, according to these parameters, there are still no signs that the current cycle has ended.
Capitalization of BTC moved less than three months ago. Source: Glassnode.
Realized bitcoin capitalization is a metric that calculates the total value of BTC coins in circulation based on the price they had when they were last moved. In this way, it works as an indicator of the movements in the market.
In line with Glassnode, this week the investment company Bitcoin Suisse indicated that end-of-cycle on-chain levels have not yet been reached. As reported by CriptoNoticias, it has been pointed out that, although long-term holders have shown selling pressure, this has been more than compensated by institutional buyers.
The growing demand is reflected in sustained capital inflows into exchange-traded funds (ETFs) of bitcoin in the United States. Since their launch almost a year ago, these instruments have absorbed the daily issuance of BTC multiple times.
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