Bitcoin holders are facing a certain weariness. However, they are not engaging in a mass liquidation, even though the drop in BTC prices erodes unrealized profits. According to a new study, Bitcoin remains largely profitable despite months of lateral price movement. Experts in the field dismiss myths concerning investors’ unrealized losses.
Investor Boredom
Bitcoin trades within a rigid channel. However, the majority of investors do not see their returns on investment evaporate. Some experts summarize the current behavior of BTC prices as the establishment of equilibrium. They highlight multiple on-chain measures showing that Bitcoin is in a period of consolidation. Moreover, the boredom felt by investors seems to be the dominant reaction across all Bitcoin markets. BTC prices consolidate within a well-established trading range, and investors remain generally in a favorable position. 87% of the circulating supply is held in profit, with a cost basis below the spot price. Using the market value to realized value (MVRV) measure, researchers have shown that a given amount of BTC is still worth more than double its purchase price in dollars. The MVRV one-year average value is currently 86%. The MVRV ratio remains above its annual reference level, suggesting that the macroeconomic upward trend remains intact.
Bitcoin Speculators Refuse to Capitulate
This conclusion contrasts with some of the more panic-stricken reactions following the recent BTC price drop this week. As noted by the specialized press, sector traders are wary of the disintegration of support trend lines and remain cautious about the multi-month lower reappearance that results from it. One of the most important dividing lines, meanwhile, is the overall purchase price of Bitcoin’s speculative investor base, the short-term holders (STH). Hence, the cost basis of short-term holders is currently $64,000.
Libertex
- Regulated broker by CySEC
- Crypto CFD trading with leverage
- 50k Demo account
Libertex
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.91% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
