Bitcoin Profits Fall 93% From December Peak - What's Next for BTC?

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After testing the $90,000 low price level several times over the past two months, Bitcoin (BTC) briefly broke out of its tight trading range earlier this week, reaching full-time high rate (ATH) of $108,786. However, a recent report by Glassnode suggests that the steady consolidation seen in recent months may be nearing an end, with the major cryptocurrency headed for the next one. important to move

Bitcoin exchange rate has increased against Bitcoin

According to the latest edit of Glassnode's 'On-Chain Report of the Week,' BTC's profit margin has dropped significantly, falling from peak of $4.5 billion in December to around $316.7 million – a sharp decline of 93%.

This drop in profit taking indicates a significant reduction in selling pressure for Bitcoin. Currently, BTC is trading within a tight 60-day price range, a pattern that has often preceded significant market volatility.

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When Bitcoin trades in a narrow price range, it either signals the beginning of a bull market rally or the final stages of a bear market. capitulation. One key metric highlighted in the report is the Realized Supply Density, which measures the supply density of Bitcoin around the current spot price within a 15% range, both up and down.

Currently, around 20% of Bitcoin supply is within this price band, indicating higher price sensitivity. Small price movements within this range could have a significant impact on investors' profitability, thus fueling market volatility.

The report also points to a key metric, CoinDay Destruction (CDD), as further evidence that selling pressure is easing. In late December and early January, CDD values were very high, indicating increased activity by long-term holders. However, the metric has cooled in recent weeks.

For the uninitiated, CDD measures the economic activity of spent BTC by tracking how long coins were held before being transferred. It multiplies the number of coins by the number of days they have remained idle, indicating whether long-term holders are spending their coins.

The recent decline in CDD suggests that many BTC investors who were expecting to take profits have already done so within the current price range. As a result, the market may enter a new price range to unlock the next wave of supply and liquidity.

Long-term investors return to accumulation mode

The report also highlights the Long-Term Owner (LTH) Binary Spend Indicator, a key metric that tracks Bitcoin holdings of long-term investors. The report notes:

Along with the large profit volumes from before, we see a significant decline in the total LTH Supply as the market reached $100k in December. The rate of LTH supply decline has since stopped, suggesting that this circulation pressure has eased in recent weeks.

Additionally, LTH inflows to crypto exchanges have dropped significantly, dropping from $526.9 million in December to just $92.3 million. That said, the total supply of LTH BTC is showing signs of growth, indicating that long-term investors returning to collection mode.