Glassnode data shows Bitcoin’s long-term owners currently have around 90% profit from the entire supply.
Bitcoin Supply Declines in Profit Share for Short-Term Holdings
The latest Weekly Report from Glassnode shows that long-term holders have been in a rise.
The relevant indicator here is the “supply in profit,” which measures the total number of coins that are currently holding a profit in the Bitcoin market.
To calculate the metric, you need to check each coin’s on-chain history in order to determine its last sale price. This means that the coin will have made some money if its previous price is lower than its current one.
Bitcoin Bullish Signal: 1k-10k BTC Holders Have Been Buying Recently| Bitcoin Bullish Signal: 1k-10k BTC Holders Have Been Buying Recently
However, if the price of the cryptocurrency was higher than its current value at that time, it would indicate that the coin has lost money.
The supply in profits indicator measures naturally the value of only those coins. Here is the chart showing how much of the supply in profit has been owned by long-term owners (LTHs).
The indicator seems to have seen a rise in value recently. Source: Glassnode's The Week Onchain Week 23 2022
Investors who own Bitcoin for more than 155 days have been considered to be LTHs. They are those that hold the Bitcoin indefinitely and have not sold or moved it. The cohort that has been holding since days less than this threshold are called the “short-term holders” (STHs).
The graph above shows that LTHs have dominated the profit supply for the past few weeks. STHs’ share dropped below 10%.
Bullish: Bitcoin Marks First Green Weekly Close After Two Months In The Red| Bullish: Bitcoin Marks First Green Weekly Close After Two Months In The Red
These values have been observed a couple of times in crypto’s history. These instances usually occur during bear market stages in the late stage.
This report shows that short-term investors are at the peak of pain at these prices, as they don’t have any unrealized profits.
The current LTH profit in profit at around 90% could be an indication that crypto is entering a late bear market, if this trend continues.
BTC Prices
At the time of writing, Bitcoin’s price floats around $29.5k, down 6% in the last seven days. The crypto’s value has fallen 18% over the last month.
Below chart displays the trends in the value of the coin during the last five working days.
Cryptocurrency prices seem to have seen a dramatic drop in the last day. Source: TradingView - BTCUSD| Source: BTCUSD on TradingView
Unsplash.com's featured image. Charts by TradingView.com. Glassnode.com's charts.