Bitcoin (BTC) Reaches New High: On-Chain Metrics Indicate Market Shift

Bitcoin (BTC) has reached a new technical higher high, with its price bouncing into the $66k region for the first time since its all-time high (ATH), according to Glassnode Insights. This upward trend is accompanied by a multitude of critical on-chain metrics also hitting higher highs, marking a noteworthy moment for the cryptocurrency market.

Cycle Navigation

The recent rally in Bitcoin's price towards the $66k mark last week has set the first technical higher high since June, suggesting a potential phase shift in the structured downtrend. Despite a slight pullback to $60k earlier this week, Bitcoin is trading at $61.7k at the time of writing. The cyclical price performance of Bitcoin since the bear market low reveals an uncanny similarity to prior cycles, with the index trading in a nearly identical position.

Deceptive Long-Term Holder Losses

On-chain analysis reveals a rise in the number of Long-Term Holder (LTH) coins held in loss, primarily due to large volumes of BTC acquired near the $73k ATH maturing across the 155-day threshold. Although the magnitude of unrealized losses held by these investors remains small, the proportion of total supply held in loss by long-term holders has surged, accounting for 47.4% of all coins in loss. This indicates a re-accumulation phase similar to the periods in 2013, 2019, and 2021.

Short-Term Holder Profitability Improves

The Short-Term Holder (STH) cohort has also seen an improvement in profitability. The STH Market Value to Realized Value (MVRV) metric, which indicates the average unrealized profit/loss held by short-term holders, has rebounded into positive territory. Over 62% of STH supply is now held in a profitable position, suggesting an easing of financial pressure on this cohort.

Institutional Demand

Institutional demand for regulated Bitcoin exposure continues to grow. The total assets under management within US Spot ETFs now have a market value of $58 billion, holding around 4.6% of the circulating Bitcoin supply. Notably, the average acquisition cost basis for these ETFs ranges from $54.9k to $59.1k, providing a psychological stress point gauge for investors based on their unrealized profit/loss.

In summary, the recent market rally and improvement in on-chain metrics indicate a potential shift in Bitcoin's market structure. Both long-term and short-term holders appear to be in a more profitable position compared to a few weeks ago, experiencing less financial stress. The robust demand from institutional investors further underscores the positive sentiment surrounding Bitcoin.