Approaching Frenzy: Over 99% of Bitcoin (BTC) Wallets Holding Profitable Coins
Bitcoin's Price Soars 50% from April Lows, Reaching an All-Time High of Approximately $112,000
In a notable development, the value of Bitcoin surged 50% from its April lows and achieved a new record high on May 23, amid a resurgence in market momentum. Simultaneously, a significant metric related to Bitcoin has quietly reached a level historically associated with major market turning points.
According to recent analysis by CryptoQuant, 99% of Bitcoin's Unspent Transaction Outputs (UTXOs) are currently profitable. This figure, which marks a critical threshold, has been linked in the past to phases of market euphoria.
UTXOs, which represent unspent Bitcoins from previous transactions, offer insights into the network's unrealized profits. When nearly all Bitcoin holders are in profit, it often reflects heightened bullish sentiment, a condition that may precede either sustained rallies or sharp corrections.
However, while the 99% level is typically deemed a sign of strength, the current macroeconomic climate, particularly pertaining to the potential policy direction of the Trump administration, has caused uncertainty, making it uncertain if true market euphoria has been reached. As a result, investors seem cautious about fully embracing risk.
Should the metric start to decline, it could indicate a shrinking of unrealized profits. This scenario could prompt early investors to liquidate their holdings, potentially fueling downside momentum and forcing latecomers, who bought near recent highs, to sell at a loss.
Meanwhile, Glassnode observed a trend suggestive of cooling momentum. Their latest update revealed a 25.1% drop in the 14-day Relative Strength Index (RSI) and a decline in net spot demand, hinting at potential short-term buyer fatigue.
In derivatives markets, open interest and funding rates climbed, indicating growing speculative activity. However, Glassnode explained that a decreasing Perpetual Cumulative Volume Delta (CVD) suggests stronger sell-side pressure and more conservatism among traders. Options data showed a mixed picture, with stable 25-Delta Skew, rising open interest, and widening volatility spreads possibly indicating hedging and profit-taking.
Liquidity conditions improved, bolstered by elevated unrealized profits and persistent activity from short-term holders. At the same time, a slight uptick in the short-to-long-term holder (STH/LTH) supply ratio, coupled with a small dip in the Realized Profit-to-Loss ratio, signaled a moderation in enthusiasm over the weekend. Active addresses on the network showed a slowdown in user activity following a period of intense engagement.
[Relevant Enrichment Data: The 99% UTXO profit level is historically associated with a phase of strong bullishness but simultaneously signals the risk of a turning point characterized by profit-taking and increased volatility. While it indicates technical optimism, investor sentiment remains guarded due to external macroeconomic factors.]
Crypto investors are cautiously watching the significant surge in Bitcoin's price, with 99% of Bitcoin's Unspent Transaction Outputs (UTXOs) currently profitable, which historically has been linked to phases of market euphoria but also signals the risk of a turning point. Meanwhile, the 25.1% drop in the 14-day Relative Strength Index (RSI) and a decline in net spot demand from Glassnode suggest potential short-term buyer fatigue, hinting at a moderation in investing enthusiasm.
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