- Bitcoin’s net unrealized profit/loss indicator was 0.27, indicating that the network was making a profit.
- BTC’s increasing dormant supply served as evidence of investors’ reluctance to sell.
Battered and bruised after the carnage of 2022, the world’s largest digital asset Bitcoin [BTC] made a robust recovery in 2023. This strengthened confidence in the long-term potential. The king of crypto coins is up more than 60% year-on-year (YTD), reaching as high as $30,000 in mid-April, according to data from CoinMarketCap revealed.
According to Glassnode, Bitcoin’s net unrealized profit/loss indicator was 0.27 at the time of publication. This indicated that the network was generally profitable.
Source: Glassnode
Despite the surge, many holders resisted the temptation to sell their coins to make a profit. This revealed an intriguing behavioral trend.
In for the long haul?
This story was analyzed with more attention by a financial researcher on Twitter. According to him, BTC holders showed resilience and were not impressed by the sharp increase in profitability.
Weekly $BTC Update network activity:
The happy move of #BTC did not inspire cohorts to realize their gains. There is a loss of profit realization,
but what does this progress mean?
Let’s explore the contours and get some introspection into this behavioral trend
🧵1. pic.twitter.com/ZrxWNqzaNq
— Research by NeuroInvest (@Neuro__Invest) May 31, 2023
He stated that market participants have been steadily moving coins out of exchanges, evidenced by the declining inflows of exchanges, as noted below. As a result, the supply on exchanges fell to significantly low levels.
Source: NeuroInvest Research
BTC’s increasing dormant supply served as further evidence of investors’ reluctance to sell. The percentage of supply held for more than a year climbed to record highs in May. Most age groups recorded an increase in their hodling activity.
This also highlighted the fact that longtime coin holders, known as “diamond hands,” believed that BTC’s peak was yet to come. These holders also hoped for a bullish rise in the coming days.
Does the story change?
On a larger scale, the aforementioned hodling story was correct, but some quirks began to show. According to data from Santiment, there was a significant outflow of coins from major addresses, evidenced by the noticeable drop in addresses by over 1,000 BTCs.
The cohort of users with more than 1,000 coins is called whales and their trading behavior, including sell-off and accumulation, tends to influence the price of BTC.
Source: Sentiment
Is your wallet green? Check out the Bitcoin Profit Calculator
At the time of writing this article, hands-on Bitcoin was trading at $26,856, and the market mood was balanced between greed and fear. This suggested that the build-up phase could last for a while without the risk of a price correction.
The Bitcoin Fear and Greed Index is 52 — Neutral
Current price: $26,856 pic.twitter.com/ZCY7zjJ5Uf— Bitcoin Fear and Greed Index (@BitcoinFear) June 1, 2023