The price of Bitcoin, after going through what the industry calls one of the worst bear markets, has been surging. Data reveals that the increasing prices have helped both short-term and long-term investors to profit.
As per data from Glassnode, an on-chain analytics firm, the percentage of short-term profiting Bitcoin holders had increased significantly, reaching almost 97.5%, its highest level since November, when the price touched $15,000 levels.
Also, data proves that the asset has also proved profitable for long-term Bitcoin holders. The basis for defining long-term and short-term holders has been the duration for which the asset has been held. The “long-term” is considered over 155 days, whereas “short-term” refers to the period of less than 155 days.
The long-term holder (LTH) market value to realized value (MVRV) ratio has risen above 1.0 for the first time in six months, indicating that the cost basis for long-term holders is now below the spot price of Bitcoin. The LTH-MVRV compares the cost-basis of the long-term holder cohort against spot prices, providing insight into the unrealized profit or loss held.
Tracing this metric shows that after 6.5 months, the market price has finally recovered above the long-term holders’ cost basis at $22.6k. This denotes that the average LTH is only just above their break-even basis. Considering the time length of LTH-MVRV traded below one and the lowest printed value, the ongoing bear market has been very comparable with 2018-2019.
Notably, investors getting long (buying and holding an asset for a long with an expectation for it to appreciate over time) on Bitcoin at a lower price basis following an extensive decline in the asset’s price is driving this trend.
Interestingly, records from the past, like January 2018, April 2021, and November 2021, were when the profit in short-term supply was increasing, and as it rose 97.5%, sharp downturns in price followed.
Analysts suggest that at such times, investors may also wish to scrutinize several indicators, including the stablecoin supply ratio (SSR) and the amount of Bitcoin being sent to exchanges. The SSR is an indicator that measures the ratio between the market cap of Bitcoin and that of all stablecoins.
The value of SSR declines as investors send more stablecoins to exchanges relative to Bitcoin, and this trend indicates more capital is being sent to exchanges to acquire more Bitcoin.
Similarly, another metric to be noted is the exchange reserve balance of stablecoins because an increase indicates increased buying pressure. Interestingly, the SSR has increased slightly since January 9, while the exchange’s balance for stablecoins has declined, which the analysts say might be concerning to investors.
Also, the opposite holds in the case of the Bitcoin exchange reserve balance, as bullish investors do not want to see the value rise. The high values would mean more investors send more Bitcoins to exchanges for selling.
At the time of publishing, Bitcoin is $22,842.20, which is about a 0.34% decline in the past day and about a 8.34% increase over the past five days.