Key Points
- Bitcoin has maintained its position above $100,000, with Long-Term Holders capitalizing on the momentum to realize unprecedented profits of $2.1 billion per day, marking a new all-time high in realized profit, according to Glassnode’s latest analysis.
- Despite significant profit-taking, market resilience remains strong, with drawdowns limited to 32% in the current cycle – notably less volatile than previous bull markets, suggesting matured market dynamics and robust institutional demand.
Market Maturity Signals New Era for Bitcoin
According to Glassnode’s final report of 2024, the Bitcoin bull run has demonstrated remarkable similarities to previous cycles, delivering year-to-date returns exceeding 150%. However, what sets this cycle apart is its ability to maintain stability despite operating at significantly larger market scales. The current cycle has seen gains of 638%, comparing favorably to previous cycles’ returns of 501% (2015-2018) and 1,085% (2018-2022). Most notably, the market has shown unprecedented resilience, with drawdowns becoming less severe despite the increased scale of operations.
Record Profit-Taking Meets Robust Demand
Glassnode’s data reveals that as Bitcoin trades above the psychological barrier of $100,000, Long-Term Holders (LTHs) have seized the opportunity to distribute their holdings at unprecedented levels. The market has witnessed a new all-time high in realized profit, reaching $2.1 billion per day. Interestingly, the majority of this selling pressure comes from holders who acquired their positions within the last 6-12 months, accounting for 38.5% of total realized profits. Meanwhile, investors holding Bitcoin for three years or more have remained relatively inactive, suggesting they may be waiting for even higher prices.
Shifting Wealth Dynamics Signal Market Evolution
A notable trend emerging from Glassnode’s analysis is the significant increase in wealth held by new investors, indicating strong market demand even at current price levels. This wealth transfer from long-term holders to new market participants typically characterizes the later stages of a bull market. However, the proportion of wealth held by new investors hasn’t yet reached the euphoric levels seen in previous cycle peaks, suggesting potential room for further market growth.
The analysis of market metrics, particularly the AVIV Ratio which measures average unrealized profit, indicates that the market may not have reached its peak. The metric has not yet hit the extreme levels typically associated with market tops, suggesting that current profit levels haven’t reached the point where they become irresistible to most holders.
This pattern of steady accumulation by new investors, coupled with measured distribution by long-term holders, paints a picture of a maturing market that has evolved beyond the volatile swings of previous cycles. The presence of institutional investors and the impact of spot ETFs appear to be providing a stabilizing effect, potentially setting the stage for a more sustainable growth trajectory in the cryptocurrency market, concludes the Glassnode report.
