Bitcoin Price Holds Above $100K Despite Record Profits for Holders – Analysis
The recent price surge of Bitcoin (BTC) above the $100,000 milestone has been accompanied by a significant decline in the supply held by its long-term holders. This trend suggests that some of the most seasoned Bitcoin investors are booking record profits as the market continues to rally.
Record Highs for Long-Term Holder Profits
The chart below shows entities that hold Bitcoin for more than 155 days, which is often considered a characteristic of long-term holders (LTH). Their behavior can frequently reflect shifts in market sentiment.
As of December 19th, the supply held by Bitcoin’s LTH dropped to $13.31 billion compared to its local peak of around $14.23 billion two months ago, according to Glassnode data. In the same period, BTC’s price has risen from approximately $58,000 to over $100,000, indicating that LTHs have been selling their holdings at local highs.
The Rise of Short-Term Holders
Bitcoin’s short-term holders (STHs) are stepping in to absorb sell-side pressure from long-term holders. Notably, the decline in LTH supply has coincided with the increase in the Bitcoin supply held by STHs. The ability of STHs to absorb this selling pressure has likely played a crucial role in sustaining Bitcoin’s price momentum above $100,000.
Glassnode Analysts Weigh In
‘The proportion of wealth held by these new investors has not yet reached the heights experienced during previous ATH cycle tops,’ noted Glassnode analysts UkuriaOC and CryptoVizArt in their weekly report, adding: ‘The interpretation here is that the market may not have reached the level of euphoric fervor, and saturation by speculators seen in prior cycles.’
True Market Deviation (AVIV Ratio)
Another useful metric to assess the state of the market is the True Market Deviation (AVIV Ratio), which measures the average unrealized profit – or paper gains – held by active investors. Based on participants’ profitability, this ratio helps determine whether the market is overextended or still has room to run.
Historically, bull markets tend to peak when nearly all investor categories achieve substantial profits. This scenario often results in overwhelming sell-side pressure, as investors lock in gains while new buyers hesitate to enter at elevated prices.
The AVIV Ratio’s extreme band, defined as +3 standard deviations (σ), typically signals such overheated conditions. As of December 19th, it stood at 1.81, well below the extreme band of +3σ (2.3). This suggests that while profits are rising, the market has not yet reached levels of unsustainable euphoria.
Bitcoin Could Continue to Climb
This scenario implies that Bitcoin could continue to climb even higher before profit-taking and reduced demand create a real market reversal.
Bitfinex Analysts Predict Mild Correction
Analysts at Bitfinex exchange estimate Bitcoin’s correction to be mild in the coming months, stating that growing institutional demand will eventually propel BTC price to $145,000 by mid-2025, or $200,000 in the best-case scenario.
As of December 19th, Bitcoin exchange-traded funds (ETF) are currently managing a little over $37 billion worth of assets, compared to $24.23 billion at the start of November, according to Farside Investors data.
Growing Institutional Demand
Meanwhile, speculation is mounting within the crypto industry over the possibility that the incoming Trump administration could establish a strategic Bitcoin reserve for the United States, a move that could push the price toward $800,000 by the end of 2025.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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Disclaimer
This article is for informational purposes only and should not be considered as investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
