Bitcoin Investors Maintain HODL Mentality Amid Rising Market Profitability
Bitcoin (BTC) investors have shown a strong commitment to holding onto their coins in recent weeks, despite a surge in market-wide profitability that typically triggers selling, as reported by Glassnode on July 1.
After a brief dip from $106,000 to $99,000 during tensions between Israel and Iran, buyers quickly stepped in to defend the short-term holder cost basis at $98,300. Following a ceasefire announcement, the market bounced back to $107,000, signaling a bullish sentiment among investors.
The report highlighted that the market cap stood at nearly $2.13 trillion, with realized cap at $958 billion, resulting in around $1.2 trillion in unrealized profit across the network.
Profitability Peaks as Realized Gains Decline
Despite reaching peak profitability levels, realized gains have been on the decline. The Market Value to Realized Value (MVRV) ratio indicates that the average coin currently holds a 125% paper gain, a significant increase from previous levels but still below the peak of 180% seen in March.
Interestingly, daily realized profits have averaged just $872 million, significantly lower than the spikes observed during previous price peaks. Both long- and short-term holders have reduced their spending, leading to a decrease in the sell-side risk ratio and signaling low activity in terms of selling pressure.
Moreover, the number of dormant coins, inactive for at least 155 days, has reached an all-time high of 14.7 million BTC, indicating that holding strategies outweigh distribution in the current market environment.
Liquidity Trends Remain Neutral to Positive
Liquidity indicators suggest a neutral to positive outlook, with the stablecoin supply ratio hovering around baseline levels. Exchange data also show a rotation of stablecoin capital into significant assets, with net inflows to US spot Bitcoin ETFs reaching a seven-day average of $298 million.
Glassnode’s analysis points to growing institutional engagement at scale, complementing the prevailing sentiment of existing holders who are reluctant to part with their coins. The report concludes that a potential price expansion may be necessary to stimulate meaningful selling, as current levels are not generating enough profit-taking to meet new demand.
In conclusion, Bitcoin investors continue to exhibit a strong HODL mentality amidst favorable market conditions. The data suggests that a fresh price surge may be needed to spur increased trading activity and capitalize on the growing institutional interest in the cryptocurrency space.