On-chain data shows that long-term bitcoin holders (so-called HODLers) are now making an unrealized profit of 55% on average.
bitcoin long-term holder NUPL has reached a value of 0.55
According to the latest weekly report of glass node, the profits held by long-term btc holders have recently increased. The indicator of interest here is “Net Unrealized Gain/Loss” (NUPL), which tracks the difference between the unrealized gains and losses that bitcoin investors currently have.
By “unrealized”, what is meant here is that the profit or loss has not yet been realized, since the investor who owns it has not yet transferred their btc to the blockchain. Once the holder eventually moved the coins, the gains/losses they had would be “realized.”
In the context of the current debate, the NUPL of only one specific segment of the market is relevant: long-term holders (LTH). LTHs are bitcoin holders who have kept their coins inactive on the network for at least 155 days.
These are the diamond hands of the market that are known to hold out during periods of uptrends and downtrends alike, and only sell when major market events take place.
“This includes periods when the market sets new ATHs, around cycle highs and lows, and during large changes in market structure (e.g. Mt Gox, Halvings and now the launch of spot ETFs),” explains the analysis firm.
Now, here is a chart showing the trend of bitcoin LTH NUPL throughout the history of the asset:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/The-average-long-term-Bitcoin-holder-now-generates-a-55-profit.png" alt="bitcoin LTH NUPL” width=”2000″ height=”1152″ loading=”lazy” data-recalc-dims=”1″/>
The value of the metric seems to have been going up in recent weeks | Source: Glassnode's The Week Onchain - Week 3, 2024
As shown in the chart above, bitcoin LTH NUPL has seen an increase in recent months as the spot price of the cryptocurrency has seen a notable rise.
“This metric reached 0.55 this week, which is significantly positive and puts the average long-term investor at a 55% unrealized profit,” the report notes. Interestingly, btc has seen some resistance around this level in the past.
As Glassnode has highlighted on the chart, the bulls encountered problems here during August 2012, June 2016, July 2019, and August 2020. In all of these cases, the resulting high was only local, except in July 2019, where the recovery The cycle rally reached a high that btc would not surpass for a significant period of time.
Generally, investors with profits are more likely to sell their coins. The larger the profits they make, the stronger the lure of profit-making can be. Therefore, it is not surprising to see that LTHs making significant gains have generated selling pressure in the market during previous cycles.
In fact, LTHs have also engaged in some selling recently, as their supply data suggests.
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/1705511567_994_The-average-long-term-Bitcoin-holder-now-generates-a-55-profit.png" alt="Long-Term bitcoin Holder Supply” width=”2000″ height=”1152″ data-recalc-dims=”1″/>
Looks like the value of the metric has seen some decline recently | Source: Glassnode's The Week Onchain - Week 3, 2024
bitcoin LTH supply is now down 75,000 btc from the all-time high recorded in November, while the opposite cohort, short-term holders (STH), have naturally gained some share.
“While 75,000 btc is a significant sum, it must also be seen in the context of the total LTH supply which represents a whopping 76.3% of the circulating coin supply,” the report says.
btc Price
bitcoin has continued its recent sideways trend over the past day as its price is currently floating around the $42,600 level.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/01/The-average-long-term-Bitcoin-holder-now-generates-a-55-profit" alt="bitcoin price chart” width=”1534″ height=”868″/>
The price of the coin hasn't shown much volatility recently | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, TradingView.com charts, Glassnode.com
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.