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Bitcoin’s realized market cap recently hit a remarkable $857 billion, indicating a strong confidence from long-term holders and a decrease in selling pressure.
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The percentage of long-term holders has increased to 39.74%, suggesting significant potential for price growth prior to reaching market peak.
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Currently trading at $96,834, Bitcoin is close to the vital $100,000 milestone, but the risk of profit-taking may threaten to draw it back below key support levels.
This article dives into Bitcoin’s robust market dynamics, revealing long-term holder trends and potential price movements as BTC aims for new highs.
Bitcoin Bull Cycle Not Over Yet, Analyst Claims
According to CryptoQuant’s pseudonymous analyst MAC_D, the Bitcoin bull cycle remains intact. This assertion stems from an analysis of Bitcoin’s realized market capitalization alongside the increasing share held by long-term holders (LTHs).
Bitcoin’s realized market capitalization, which calculates its total value based on the price at which the coins last changed hands, has surged to an astonishing $857 billion. This increase is pivotal as it highlights the value maintained by long-term investors and the actual acquisition cost of the circulating coins.
Bitcoin Realized Market Cap. Source: CryptoQuant
When the realized market cap of BTC advances, it generally indicates that long-term investors are accumulating more of the asset. Additionally, the coins changing hands occur at higher price levels, reinforcing market confidence in Bitcoin’s future valuation.
An increase in the amount held at elevated prices can alleviate selling pressure from long-term holders, who are less likely to sell unless the market exceeds their purchase price. This trend may reduce downward pressure and pave the way for upward movements in the near term.
Significantly, the rise in the share held by long-term holders reinforces this narrative.
“At the previous cycle’s price peak, their ratio stood at 15.66%, while now it has escalated to 39.74%. This strongly suggests that the market has not reached its peak yet, particularly when compared to the previous cycle’s metrics,” notes MAC_D.
Bitcoin UTXO Age Bands. Source: CryptoQuant
This increase indicates that a considerable portion of the Bitcoin supply is retained by long-term investors. Given that the preceding cycle’s high occurred with a significantly lower ratio, the current levels imply that there is substantial room for further price appreciation before reaching a new cycle peak.
BTC Price Prediction: Profit-Taking Could Derail Rally
At present, Bitcoin trades at $96,834, remaining securely above the support level of $95,513. Should the accumulation by long-term holders persist, Bitcoin could advance towards the next resistance level of $98,118.
If this resistance is successfully breached, Bitcoin could soar past the pivotal $100,000 mark, marking a new phase in the ongoing bull run.
BTC Price Analysis. Source: TradingView
Nonetheless, if profit-taking accelerates, this optimistic scenario could come under pressure. In such a case, Bitcoin’s price may fall below the crucial support of $95,513, potentially dropping to $91,473.
Conclusion
In summary, Bitcoin’s market indicators suggest continued optimism among long-term holders, with potential for further price growth before a market peak is realized. The dynamics surrounding BTC’s realized market cap and LTHs’ proportion reinforce the narrative of growing market confidence. However, careful attention must be paid to profit-taking activity, as it holds the power to disrupt this bullish trend.
