Bitcoin price enters 'euphoria' zone as fortunes rotate

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Bitcoin

$73,163

The price has increased by more than 200% in the past year. A new all-time high of over $73,000 was reached on March 13. The rally moved investor sentiment "closer to optimism" and was characterized by a shift in wealth from long-term holders to new investors, according to market intelligence firm Glassnode.  

Bitcoin investor sentiment "enters excitement zone"

Market Intelligence Glassnode’s “The Week Onchain” report this week noted that Bitcoin recently surpassed the all-time high of $69,000 set in November 2021, creating “the fourth new cycle ATH in history.” .

Analyst Checkmate noted that Bitcoin's sharp rise above $72,000 has "transformed this phase of the Bitcoin bull market into a 'euphoria zone'" ——This stage "is often accompanied by new ATH."

This is further supported by data from Alternative, which shows that the market's "sentiment and sentiment" are at " A zone of extreme greed” (81). In the "extreme greed" zone, just like the "euphoria phase," investors "tend to become greedy when markets rise, leading to FOMO (fear of missing out)" when speculators enter the market.

Glassnode notes that “Historically, this moment has triggered clear patterns of investor behavior Shifts, especially in terms of the relative balance between the holder and speculator groups."

The rotation of wealth from the "HODLer group to the speculators"

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The on-chain analytics firm also observed a "classic" feature of the Bitcoin bull market, which is the transfer of wealth from "older" to "younger" investors.

The chart below shows that as Bitcoin hits all-time highs, "investors who have accumulated Bitcoin at cheaper prices over the past few months to years" accelerated to distribute pressure.

"This wealth transfer is at work again, with the proportion of wealth held in 'youngcoins' (transferred within the past 3 months) increasing since October 2023 138%."

< figcaption>Bitcoin: HODL volatility achieved. Source: Glassnode

Glassnode said this highlights "the net return of long-term investors who have previously held the token for at least 3 months." expenditure".

This information is confirmed by more data from Glassnode, which shows that the number of new Bitcoin wallets increased from 308,743 to 475,005 in one month , an increase of 54%. This increase mirrors BTC’s 58% gain over the same period.

Glassnode analysts report that short-term supply holders have increased by "+ 810k BTC", which they believe came from two sources: "660k BTC transferred from long-term holders" and "150k BTC withdrawn from exchange balances we monitor".

In contrast, the report states that long-term holders "the supply has declined by -660,000 Bitcoins over the same period."

Checkmate said,

"Overall, this wealth transfer appears to be following a very similar path to all previous Bitcoin cycles, representing both a shift in ownership structure and Represents the dynamic balance between supply, demand and price. ”

Bitcoin’s rise triggers “spot profit-taking”

BTC 70% so far this year The rise triggered profit booking by long-term holders, "balanced by equally sized inflow demand from the short-term holder group." This was evidenced by the rise in the "realized profits indicator," which is "net realized gains and losses." "Indicators" that provide insights into capital inflows, demand intensity and network profitability.

The report states that,

“This week, the size of realized profits locked through on-chain spending reached a statistically high level, more than one standard deviation above its long-term average. ”

According to Glassnode, this is one of the signs of the beginning of the "euphoric" phase, as observed during the bull markets of 2017 and 2021.< /p>

According to Glassnode, the realized profit metric has surged to " Significantly positive levels, indicating profit-taking and increased demand for long leverage."

Cryptoslate analyst James Van Straten said that due to short-term and long-term holding Investors "continued record profit-taking" and "accumulated slightly more than issuance," reaching $4 billion on March 11.