- On-chain data shows that the end of the bear market is approaching.
- Increasing open interest and positive funding rates increase the likelihood of demand for the $30,000 price level.
- Why is the difference between Bitcoin (BTC) short-term holders and long-term holders important?
For the first time in over two years, the realized price of short-term holders has exceeded the realized price of long-term holders. This signal had marked the end of previous bear markets.
Why is the Bitcoin Short-Term Holders, Long-Term Holders Chart Important?
According to data from on-chain analytics platform Glassnode, the realized price of short-term holders was $21,742, while the realized price of Bitcoin (BTC) long-term holders was $21,334.
When the realized price for short-term holders (red line in the chart) exceeds the realized price for long-term holders (blue line in the chart), it means that the average profit of people who have recently bought BTC (short-term holders) is higher than the average profit of people who have been holding Bitcoin for a longer period of time (long-term holders).
Bitcoin’s historical performance shows that this situation has signaled the transition from bear market to bull market three times.
An analyst from CryptoQuant, nicknamed Tarekonchain, evaluated Bitcoin’s Spent Output Profit Ratio (SOPR) and found that the metric was at a level similar to the low level recorded in November 2022.
Tarekonchain, who stated that this situation indicates the re-emergence of the bull market, said:
“When the Spent Output Profit Ratio (SOPR) reaches very low levels, the price of bitcoin starts to rise again. For example, when the price of bitcoin reached $16,000 in November 2022, the SOPR was at a very low level, indicating that many investors sold their coins at a loss. Today, the SOPR has reached a similar low level again, which could be a possible sign of bullish sentiment in the market.”
Bitcoin (BTC) may be well positioned for a long rally
According to data from Santiment, at the time of writing, BTC’s weighted sentiment was positive and was 0.901. When a cryptocurrency’s weighted sentiment is positive, it usually indicates the presence of bullish sentiment in the market, which attracts investors and increases demand for the coin.
However, it is noteworthy that BTC’s weighted sentiment has been rapidly declining since March 12. Additionally, while profit realization has increased in the last month, the coin’s weighted sentiment has decreased by 87% in the last three weeks.
While many investors still demand the $30,000 price level for BTC, according to data from Coinglass, the number of open positions has increased by 31% in the last 20 days.
An increase in a cryptocurrency’s open positions indicates that there are more open positions or contracts for that coin in the futures market. This may indicate an increase in investor demand and interest in the coin, as traders open positions while waiting for price movements.
Increasing positive funding rates in the recent period have shown that many investors have funded positively for a potential price rally.
