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Bitcoin – Analyzing why BTC’s all-time high isn’t causing LTH ‘euphoria’
The recent surge in the value of Bitcoin (BTC) has reached a new all-time high above $118K, but surprisingly, it seems that long-term holders are not as euphoric about this milestone as one might expect. Glassnode data reveals that the Long-Term Holder Net Unrealized Profit and Loss (NUPL) metric stands at 0.69, remaining below the “euphoria” threshold of 0.75.
This unusual phenomenon can be attributed to various factors. Firstly, investors have shown restraint in their enthusiasm, likely due to uncertainty surrounding the sustainability of the rally and a growing unease about potential market corrections. This cautious approach indicates that long-term holders are not feeling overwhelmed by FOMO (fear of missing out), which usually drives euphoric behavior.
Secondly, the fundamental strength of Bitcoin’s fundamentals is evident in its rising network activity and whale transactions. As observed by IntoTheBlock data, large transaction counts for transfers above $10 million have increased by 125.89%, indicating growing confidence from whales and institutional players. Historically, such a spike has preceded major market shifts.
Furthermore, the imbalance in short positions on Binance with a Long/Short ratio of 0.47 further suggests that bears are over-leveraged, potentially setting the stage for violent upside rallies fueled by forced short liquidations. This dynamic could also be driven by the dominance of short positions among retail traders.
This reluctance to sell off their BTC holdings and the lack of widespread euphoria can be seen as a positive sign. It is an indication that long-term holders are not yet convinced they need to cash in on their gains, leading to continued buying pressure and, ultimately, support for the current rally.
The recent trend may also signal that investors have become more discerning about market movements, no longer falling prey to FOMO-induced euphoria. As such, the momentum behind Bitcoin’s price action could be more sustainable as a result.
In conclusion, it is essential to recognize this anomaly and its potential implications for the cryptocurrency’s future performance.
Source: eng.ambcrypto.com
