On-chain data shows that short-term Bitcoin holders are reacting to recent price increases by participating in profit realization.
Short-term Bitcoin holders see a surge in profits
In a new post on X, on-chain analytics firm Glassnode talked about the latest trends in realized gains for short-term Bitcoin holders. Realized profit here, as the name suggests, refers to a metric that measures the total profit earned by BTC investors through trading.
This metric works by looking at the transfer history of each coin being moved on the network to see what prices it traded at previously. If the previous sale price was lower than the latest spot price of the token, then the current trade of that particular coin has resulted in some net profit.
The exact amount of profit associated with the move is, of course, equal to the difference between the two prices. Realized profits sum this difference over all profitable moves on the blockchain.
In the context of the current topic, the realized gains of only one segment of the market, namely short-term holders (STH), are important. This group includes BTC investors who purchased the coin within the last 155 days.
STH is generally considered to represent the fickle side of the market, and its members tend to react in some way whenever market volatility appears. Bitcoin has been surging above the $74,000 level in recent days, and STH appears to be reacting.
As shown in the graph above, the 12-hour moving average (MA) of Bitcoin STH realized profits soared to a value of $18.4 million per hour as the price rose. Since the advent of profit-taking, the rise in the value of cryptocurrencies has stagnated. “This is consistent with the pattern observed in February, where short-term holders continue to deplete each rally above the +$70,000 level, absorbing momentum before a breakout occurs,” Glassnode explained.
It remains to be seen whether Bitcoin can overcome the pressure to realize profits from STH this time around, or whether the fate of this bull market will be similar to other recent recovery attempts.
In other news, the cryptocurrency Fear & Greed Index has returned to fear territory, breaking a long streak of extreme fear in the market.
The rise in sentiment suggests that the price increase has renewed some optimism among traders, but the market mood remains fairly bearish as the index is still at a value of 28.
BTC price
Bitcoin topped $75,000 during the price surge, but has since returned to $74,300.
