The supply “in profit,” a measure of market sentiment, has risen 20% since January.Read MoreCoinDesk
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
On-chain indicators are pointing toward positive sentiment for bitcoin, the world’s largest cryptocurrency by market capitalization.
The bitcoin supply “in profit,” which is the percentage of existing coins whose price at the time they last moved was lower than the current price, has increased since the start of the year, according to data from Glassnode. The indicator has increased by over 20% since early January.
(Glassnode)
“This implies that larger and longer-term investors currently hold profitable on-paper spot positions,” Bitfinex analysts wrote in a report. “This trend is healthy for the latter half of a bear market as a sustained 30-day uptrend after an extensive downtrend on this indicator has historically provided a good buy signal for the following two years,” the report added.
Although bitcoin and the wider crypto market have been trading well below the all-time highs reached in November 2021, the crypto market has witnessed a positive upward trend over the past three months with bitcoin rising 50% over the last three months.
On-chain data also suggests “HODLer” (HODLers are considered long-term holders of the cryptocurrency) conviction is high, with the Reserve Risk for bitcoin recently falling to its lowest level ever.
Reserve Risk is a cyclical oscillator that models the ratio between the current price and the conviction of long-term investors, according to the Bitfinex report. The indicator trades at low levels when there is heavy investor accumulation and HODLing is the preferred market strategy.
“The current price is the incentive to sell and the conviction in the ratio is a series of sub-metrics that factor in the opportunity cost of not selling. Lower the ratio, higher the conviction that investors have,” the report said.
Read more about
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.
