Bitcoin’s Rebound Pushed Most Investors Back into Profit

Bitcoin has rallied above $107,000, taking the vast majority of investors back into profit, says blockchain data platform Glassnode, with total unrealized gains hitting a whopping $1.2 trillion.

The coin currently stands at $109,716, having appreciated 2% over the last 24 hours. The market overall is experiencing an uptick, with nearly all coins in green at the time of writing.

Also, looking at both the Market Capitalization and Realized Cap measures, Glassnode found “substantial growth” this cycle. The former surged from $304 billion to $2.13 trillion, and the latter jumped from $400 billion to $955 billion. “Together, they highlight not only the substantial capital inflows into Bitcoin, but also its maturation toward becoming a multi-trillion-dollar asset,” it argues.

Moreover, the total unrealized profit is currently at $1.2 trillion. This indicates “the substantial value appreciation” which BTC investors have seen, as well as “the incentive for potential sell-side pressure that may emerge if sentiment shifts.”

Source: Glassnode

Meanwhile, the average paper gains (losses held by the average market participant) stand at +125%. The report claims this suggests that BTC investors are “sitting on significant profits.” This number is still lower than the +180% profitability seen in March 2024 when the price hit the ATH of $73,000 and December 2024 when it hit $00,000.

That said, some $872 million worth is locked in profit daily at this point. This is lower than the $2.8 billion and $3.2 billion in realized profit seen during the ATHs of $73,000 and $107,000, respectively.

Notably, the report highlights, recent drops didn’t “significantly impact investor profitability.” Moreover, valuation frameworks show a positive profitability across holders of all coin ages.

Source: Glassnode

The market jump comes after several days of consecutive, albeit relatively minor, decreases that followed Israel’s attack on Iran, resulting in casualties and further conflict in the region.

Given that geopolitical headlines influence the crypto market, the risk of further downside remains, Glassnode says. However, the decrease in tensions between the two countries helped stabilize market sentiment and fuel price recovery.

Moreover, per the analysts, “the market’s ability to hold the Short-Term Holder cost basis during such a volatile and uncertain period is a constructive signal, suggesting that the bulls are still in control, and that underlying momentum may remain skewed to the upside.”

Investors Brace for Possible Increase in Market Volatility

Citing Glassnode data, Gadi Chait, Head of Investment at Xapo Bank, noted that “Bitcoin’s on-chain metrics continue to showcase the strength of its current market position.” BTC supply in profit rising reinforces “just how bullish recent momentum has been,” Chait says in an email.

However, he also warns that elevated levels of profit are often followed by increased market volatility. “Historically, when such a high percentage of supply sits in profit, the chances of profit-taking rise. That, in turn, introduces short-term market movements even when there is a broadly optimistic outlook,” Chait argues.

Meanwhile, the Glassnode report found that, despite a surge in profitability, investor behavior shows a strong preference for HODLing. The current price range seems insufficient to trigger significant profit-taking, it noted. Several metrics show this, namely declining realized profits, a downtrend in Liveliness, and Long-Term Holder supply hitting a new ATH.

The decline in sell-side pressure can be seen in the total supply held by the Long-Term Holder (LTH) cohort. It reached a new all-time high of 14.7M BTC. “This underscores that HODLing remains the dominant market behavior amongst investors, with accumulation and maturation flows significantly outweighing distribution pressures,” Glassnode says.

Moreover, the behavior of Long-Term Holders further reinforces this argument. After a brief uptick in sell-side pressure into the ATH, this cohort slowed their spending as well.

Finally, the Liveliness metric saw significant upticks during the two previous BTC price ATH formations. This suggested that spending activity and profit taking took over the market. Yet, during the latest ATH formation, Liveliness trended downward, reinforcing “that HODLing remains the dominant behavior among investors, and that a range expansion in price may be necessary to incentivize renewed spending activity.”

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