Bitcoin (BTC) course is a deflationary currency that is basically supposed to rise in price. In the long run, this has always happened so far. The picture shows Bitcoin coins in front of a smartphone price graph.
The entire Bitcoin environment currently looks positive. Bullish news has dominated the market for the last few weeks and PayPal’s announcement that it will now also play an active role in the crypto world has pushed the Bitcoin price towards $ 13,000. A current Glassnode analysis shows that 98% of all addresses are in the profit zone.
Does this threaten us with a price correction? – In this article, we take a closer look at the data from Glassnode.
Bitcoin correction through profit taking?
First, let’s note that the entire crypto ecosystem looks bullish. Regardless of whether Bitcoin, Ethereum or the DeFi market: The development this year has shown that cryptocurrencies are by no means in the corner of an „illegal currency“, but are viewed much more as a sensible investment and addition to the portfolio.
In this respect, the current analysis by Glassnode is more of a short-term indicator, which in turn could only point to a short-term correction of the Bitcoin price.
What is certain, however, is that 98% of all Bitcoin transactions (UTXOs) are currently in profit.
Furthermore, Glassnode says the following important sentence:
A level that we haven’t seen since December 2017 and that was typical of earlier bull markets.
So the bottom line is that we are currently observing a phenomenon that was seen in previous bull markets and was last reached at the previous Bitcoin all-time high in Dec. 2017.
HODL mentality remains strong with 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” have a higher price than the price at the time they were moved to the respective address.
So now we have an impression that the majority of transactions for Bitcoin owners would end in a profit.
In our opinion, there is no real danger, as the HODL mentality is very large. In addition, many buyers have a long-term investment horizon. Another factor is the large purchases made by many companies and institutions that are not interested in a short-term sale.
The graphic published by Glassnode should therefore not be a cause for panic. Rather, it underlines the current bullish sentiment and shows the good performance of Bitcoin.