Bitcoin (BTC) is on the verge of hitting its all-time high, with anticipation and fear growing around the cryptocurrency. Despite the optimistic outlook, trading volumes have slumped, dropping below $14 billion in the past week, a level last seen when BTC was trading under $30,000 in 2023.
Who Are the Long-Term Bitcoin Investors?
The drop in trading volume could indicate that more Bitcoin addresses are opting to hold onto their BTC. Currently, Bitcoin trades at $68,899.70, showing a 2.14% increase over the last 24 hours. The rise in the MVRV ratio suggests that many Bitcoin holders have seen profits recently.
This increase in profitability might tempt more investors to sell BTC, potentially driving the price down. Nonetheless, the Long/Short difference for BTC has also risen, hinting at a growing number of long-term holders in recent days.
Long-term investors typically resist selling during significant price swings, which can help stabilize the market. Another sign of Bitcoin’s appeal is the count of active addresses on the network. Data from Santiment indicates that the number of daily active addresses has dropped sharply in recent weeks.
What is the Impact of NFTs?
The NFT sector’s downturn might be contributing to the reduced network activity. NFT sales, buyers, and sellers have all seen declines, with Crypto Slam’s sales volume plummeting by 75.36% recently, and total transactions falling by 60%. If this trend continues, it could impact miner revenue.
Lately, Bitcoin miners have experienced a significant dip in daily revenue. If this persists, miners might need to sell their tokens to stay profitable, which could put additional downward pressure on BTC.
Key Insights for Investors
- Bitcoin’s recent price surge has not been matched by trading volume.
- Increased MVRV ratio indicates profitable positions for many BTC holders.
- Growing number of long-term holders might stabilize Bitcoin’s price.
- Decreased active addresses and NFT market downturn could impact BTC network activity.
- Miner revenue decline might lead to potential sell-offs, affecting BTC prices.
As Bitcoin inches closer to its peak, the dynamics of trading volume, profitability, and network activity will play crucial roles in its near-term performance. The interplay between these factors will be essential for investors to monitor.