Last week marked a notable high for Bitcoin (BTC), as its price soared past $109,000, coinciding with the inauguration of Donald Trump as the United States’ 46th President.
However, the momentum didn’t last, and Bitcoin now trades below $105,000.
Despite this dip, recent analysis reveals that the overall sentiment among Bitcoin holders remains largely optimistic, with few signs of a significant downturn.
Investor Sentiment and Profitability
One crucial aspect of understanding investor sentiment in the crypto world is assessing the profitability of Bitcoin holders based on their average acquisition costs, often referred to as realized prices.
A recent analysis by the analyst Crazzyblockk on CryptoQuant dives into the profitability across three different categories of Bitcoin investors.
The data indicates that long-term holders—those who have clung to their Bitcoin for more than six months—are experiencing a substantial average profit of 70%.
On the other hand, short-term holders, who have held their assets for less than six months, are enjoying a more modest profit of 14.5%.
This shows their adeptness at managing the recent market fluctuations.
Interestingly, new investors—those who have ventured into Bitcoin in the last month—are also seeing positive returns, albeit a smaller 4.7%.
This statistic is promising, as it suggests that none of the investor categories are facing major losses at present, which reduces the chances of a massive sell-off.
Market Resilience and Sell-offs
While profit margins have seen slight declines in recent weeks, the Bitcoin market proves resilient against bearish shifts, especially as long as short-term and new investors continue to secure profits.
It’s important to note the interplay between different categories of Bitcoin holders, particularly regarding profit-taking trends among long-term investors.
Crypto analyst Ali Martinez pointed out that these long-term holders sold off 75,000 BTC just last week.
The Bitcoin sold by these veteran investors has largely been absorbed by short-term and newer investors, which helps to cushion any potential market fallout from these sell-offs.
However, should the newer investors face losses, it could spark a wave of bearish sentiment surrounding Bitcoin.
Future Outlook for Bitcoin
Currently, Bitcoin is trading at $104,737, reflecting a minor uptick of 0.09% in the last 24 hours.
Over the past week, the cryptocurrency has dipped by 0.46%, yet it has impressively risen by 8.71% over the last month, supporting a bullish outlook for the BTC market overall.
Looking forward, optimism surrounding Bitcoin might see an uptick, especially considering President Trump’s favorable views on cryptocurrency.
Early indications from his administration hint at a bright future for the sector, demonstrated by the SEC’s repeal of the contentious SAB 121 and an executive order aimed at investigating the potential emergence of a national digital asset stockpile.
The dynamics of the Bitcoin market are evolving, but it appears resilient and ripe for potential growth, much to the excitement of its investors.
Source: Bitcoinist
