Over the last weekend, the world’s largest cryptocurrency Bitcoin (BTC) has shown a strong upswing along with the broader crypto market. As of press time, BTC is trading 1.78% up at a price of $23,097 with a market cap of $445 billion.
However, on-chain data hints that investors need to be cautious about any new entry at this point. As per data from Glassnode, short-term investors have seen a dramatic surge in the coins held in profit during the recent BTC price rally.
A staggering 97.5% of short-term holders are currently in profit which might lead to a profit booking going ahead. In their latest report, Glassnode mentions:
The recent surge to $23K has pushed this metric to > 97.5% in profit for the first time since the ATH in November 2021. Given this substantial spike in profitability, the probability of sell pressure sourced from STHs is likely to grow accordingly.
Retail Participation in Bitcoin Grows
Furthermore, the Glass node report explains that ever since the LUNA collapse, the Bitcoin participation by retail players – holding between 1 to 10 BTC – has jumped up significantly over the last few months. Over the past eight months, retail entities have recorded a 4.4% increase in BTC supply held and they now hold 17.1% of the Bitcoin Circulating Supply.
This month so far, the Bitcoin price has already appreciated by 33% with its rally from $16.9k to $23.1k. As a result of this, the percentage supply in Profit has also surged from 55% to over 67%. This 12% jump in a matter of just 14 days is the sharpest spike in profitability in comparison to the previous bear markets.
The recent price appreciation in the BTC miners has also helped Bitcoin miners who were in great distress over the last year. Thus, similar to short-term holders, Bitcoin miners are taking this price pump as an opportunity to book profits. As Glassnode explains:
With a notable recovery in miner USD-denominated revenues, the resulting behavior shift has switched from accumulation of +8.5k BTC/month, to distribution of -1.6k BTC/month. Miners have spent some -5.6k BTC since 8-Jan and have experienced a net balance decline YTD.
The post Why Bitcoin (BTC) May Face Selling Pressure Ahead, Hold Or Sell? appeared first on CoinGape.
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