The overall Bitcoin environment currently looks positive. Bullish news has dominated the market over the last few weeks and the announcement of PayPal to play an active role in the crypto world has pushed the Bitcoin price towards the 13,000 dollar mark. A current Glassnode analysis shows that 98% of all addresses are in the profit zone.
Bitcoin correction through profit taking?
Let’s first note that the entire crypto ecosystem looks bullish. Whether it is Bitcoin, Ethereum or the DeFi market: This year’s development has shown that crypto currencies are far from being in the corner of an „illegal currency“, but are much more seen as a sensible investment and addition to the portfolio.
In this respect, Glassnode’s current analysis is probably more of a short-term indicator, which in turn could only point to a short-term correction of the Bitcoin price.
However, it is clear that currently 98% of all Bitcoin transactions (UTXOs) are in the profit zone.
Furthermore, Glassnode says the following important sentence:
This is a level we have not seen since December 2017 and was typical for previous bull markets.
The bottom line is that we are witnessing a phenomenon that was seen in previous bull markets, the last time we saw it was at the previous Bitcoin all-time high in December 2017.
HODL mentality remains strong at Bitcoin
But what does this mean for the Bitcoin course? – Is the indicator positive or rather negative for the price?
First of all, we need to be clear about what the indicator actually says:
The metric says that 98% of all Bitcoin „in a wallet“ currently has a higher price than the price at the time it was moved to the address.
So now we have an impression that the majority of transactions would end with a profit for Bitcoin owners.
However, we do not think there is any real danger, as the HODL mentality is very strong. In addition, many buyers have a long-term investment horizon. Another factor is the large purchases of many companies and institutions that are not interested in a short-term sale.
The chart published by Glassnode should therefore not be a cause for panic. It rather underlines the current bullish sentiment and shows the good performance of Bitcoin.