Bitcoin Near ‘Euphoria’ Boundary: What Happens After A Breach?

by

As a long-term Bitcoin investor with a keen interest in on-chain data and market trends, I find the recent analysis by Glassnode particularly intriguing. The fact that Bitcoin is currently trading near the historical boundary for the ‘euphoria’ phase of the market, as evidenced by the Realized Price for long-term holders (LTHs), is a crucial piece of information for me.

As a crypto investor, I’m keeping a close eye on Bitcoin‘s current price action based on historical data. The on-chain indicators suggest that we’re approaching a price level where Bitcoin has previously marked the peak of market euphoria.

Bitcoin Is Not Far From This Long-Term Holder Cost Basis Level

As a researcher studying the current trends in Bitcoin (BTC), I’ve recently come across some intriguing insights from Glassnode’s latest weekly report. It appears that BTC’s recent price action has been hovering near the threshold between the ‘equilibrium’ and ‘euphoria’ stages of the bull market cycle.

For long-term investors, the price level under consideration amplifies their realized profits, represented by the Realized Price. Realized Price functions as a metric derived from the blockchain data, indicating the aggregate average purchase cost for Bitcoin investors.

If the price of a cryptocurrency is greater than this benchmark, it’s a sign that investors have accumulated more profits than losses. Conversely, when the asset’s value falls below the given indicator, it may indicate that losses outweigh gains on the blockchain.

In the present discussion, the significance of the Realized Price for long-term Bitcoin investors, also known as “long-term holders” (LTHs), is worth exploring. LTHs are individuals who have kept their Bitcoin coins for over 155 days without any record of sale or transfer on the network.

Here’s a chart illustrating the development of the Realized Price for LTHs, along with a few of its corresponding metrics, during the last ten years.

Bitcoin Near ‘Euphoria’ Boundary: What Happens After A Breach?

I observe from the graph before me that the Bitcoin Long-Term Holder (LTH) Realized Price hovers near the $21,800 mark at present. This figure is notably lower than the current market price of the digital asset. Consequently, this group of investors would be sitting on substantial profits as of now.

Based on statistical analysis, investors who keep their Bitcoin (BTC) stash for longer durations are less inclined to sell those coins compared to others. Consequently, the Long-Term Holder (LTH) group, known for their extended holding periods, comprises some of the most determined and resilient market participants.

Members of this collective tend to be unfazed by market fluctuations, such as surges or downturns. However, once their earnings expand significantly, these investors become increasingly enticed by the prospect of cashing in on their profits.

In historical terms, the Bitcoin market tends to exhibit this phenomenon when it reaches the “euphoria” stage. According to Glassnode’s definition, this occurs when the price surpasses a three and a half times multiple of the Long-Term Holder (LTH) Realized Price.

At present, the price of this asset is at $76,400, slightly surpassing its previous consolidation range. Based on historical data from the last two bull markets, a significant price surge occurred once the cryptocurrency breached this particular threshold.

The length of time it is uncertain if Bitcoin will need to surpass this threshold before transitioning out of its current “balanced” stage and igniting excitement among investors remains to be determined.

BTC Price

As a crypto investor, I’ve noticed that Bitcoin’s price has been trending downward and hovering near the lower boundary of its recent price range in the past few weeks. Currently, it’s priced around $61,000.

Bitcoin Near ‘Euphoria’ Boundary: What Happens After A Breach?

Read More

2024-06-27 08:19