Investor Profits Remain High Despite Turbulent Market Report Finds
Despite the recent significant drop in Bitcoin’s value to just above $65,000 and Ethereum trading around $3,500, key market indicators remain positive.
At the time of reporting, Bitcoin is trading at $65,217, down 3.34% in the past week due to increased selling pressure. Meanwhile, Ethereum is on a path to recovery, currently trading at $3,534 with a modest gain of 0.34% over the last seven days.
In the current market environment, Glassnode’s latest weekly report has captured the sustained market positivity. The report has confirmed that Bitcoin’s price volatility has led to sideways movement, which can often be interpreted as a sign of investor disinterest.
However, more than 87% of Bitcoin’s circulating supply is still held at a profit. This is evident from the unrealized profits held by Bitcoin investors, who are currently experiencing an average unrealized gain of about 120%, a level seen in previous market cycles near all-time highs.
The Market Value to Realized Value (MVRV) ratio, which measures these unrealized gains, indicates that the uptrend remains intact, with the current stabilization occurring within a standard deviation range that highlights significant profitability for investors.
Furthermore, the recent market peak saw considerable profit-taking, particularly from long-term holders, which increased the market’s liquid supply. As a result, the market now needs time to absorb this excess supply, reducing selling pressure and realized profits to maintain a balanced market condition.
Despite healthy investor profits, Bitcoin’s trading volumes on the network and major exchanges have decreased, suggesting reduced speculative activity and increased market indecision. Short-term holders have reduced their exchange deposits compared to earlier in the year, while long-term holders show minimal activity, indicating a state of equilibrium that requires significant price changes to provoke further market movement.
Most coins being moved are still in profit, with an average realized gain significantly higher than the losses. This suggests that while holders are selling, the demand is sufficient to take on this pressure, although not enough for an upward push. This scenario benefits range traders and arbitrageurs more than those seeking directional moves.
The futures market reflects a similar trend of growing open interest, now exceeding $30 billion, close to its previous all-time high. A large part of this open interest is due to demand-neutral strategies like cash-and-carry, which involve profiting from price differences between the spot and futures markets.
Additionally, institutional investors are becoming increasingly active, as evidenced by the increasing open interest on the CME Group exchange, currently sitting at $10 billion. However, like the spot market, futures trading volumes have also decreased.
