Bitcoin has fallen below $27,000 as short-term holders have taken their biggest profit since the November 2021 peak.
Have Bitcoin Short-Term Profit Realization Has Spiked Recently
According to data from an on-chain analytics company Glassnode, short-term holders have recently realized about $292 million in profits. The relevant indicator here is “realized profit,” which measures the total amount of profit (in USD) locked up by investors in the current Bitcoin network.
This metric works by going through the on-chain history of each traded coin to see the last transaction price. If the previous sale price for any coin is lower than the price it is currently moving, then it is sold at a profit.
The Realized Profit indicator then adds the amount of profit to that value and then repeats the process for all transactions in the BTC block.
This indicator can also be applied to certain market segments, like groups of investors. The entire Bitcoin sector can be divided into two main groups of investors: short-term holders (STH) and long-term holders (LTH).
Here, the relevant group is the former, including all investors who have held the coin since less than 155 days ago. Of course, those who have money carry it longer than those in LTH.
The history graph of Bitcoin to STH shows all quotes for the last 5 years.
The value of the metric seems to have spiked pretty high in recent days | Source: CryptoQuant
Bitcoin STH realized the profit metric used in the chart is “entity-regulated” one, meaning that transactions between wallets owned by the same entity have been excluded from the data (the entity can be both a single investor and a group of owners. ).
From the chart, it can be seen that the indicator is at a slightly lower price during the bear market, which is appropriate because the price covered in 155 days will be greater or close to the current price, so there will not be many opportunities for STH to make a profit significant.
However, this trend changed when the rally started in January, as STHs who bought at low bear market prices now suddenly made huge profits.
The metric dropped in value when the price of BTC fell below the $20,000 mark earlier this month, but with a sharp upward trend in the past week, STH has once again started to realize some significant gains.
The current metric value shows that STH has recently gained around $292 million, the highest value since November 2021, when Bitcoin registered its highest price.
The gains from these investors may have affected the price, and it may appear that the asset has suffered a bearish effect from this, as BTC has now fallen below the $27,000 mark.
BTC price
At the time of writing, Bitcoin is trading around $26,800, up 10% over the past week.
BTC has plummeted on the daily chart | Source: BTCUSD on TradingView
Featured images from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com