Long-Term Holders Reap Rewards

Bitcoin’s long-term holders (LTHs) saw their collective wealth increase substantially as the price of Bitcoin (BTC) climbed from $74,450 to $94,900 in April. Data indicates a $26 billion gain in the realized market capitalization of LTHs between April 1 adn April 23.

This increase underscores the benefits of holding bitcoin through market fluctuations. The realized market cap of LTHs increased from $345 billion to $371 billion during this period.

Short-Term Holders Feel the Burn

In contrast to the gains made by long-term holders, short-term holders (STHs) experienced losses during the April drawdown. Many STHs sold their Bitcoin at a loss, reflecting a tendency to react to market stress by rotating positions.

This behavior mirrors trends observed in 2024, where STHs frequently sold to LTHs during market corrections.

Market Correction: A Necessary Evil?

Bitcoin’s recent 30%+ correction, occurring between January and early April, aligns with ancient market cycles. Such drawdowns are common after Bitcoin reaches new all-time highs,often “shaking out weaker hands” before the price resumes its upward trajectory.

past cycles in 2013, 2017, and 2021 demonstrate that thes corrections are a routine part of Bitcoin’s market behavior.

Bitcoin’s Decoupling from Traditional Markets

Bitcoin’s increasing independence from traditional markets, especially as U.S. equities face pressure, has enhanced its appeal as an investment. While stocks have faltered,gold prices have surged,indicating investor demand for assets that are not correlated with the broader market.

This decoupling likely bolstered the confidence of long-term holders in Bitcoin’s store-of-value narrative.

Bullish Outlook: Supply in Profit

The total supply of Bitcoin in profit has increased above the “threshold of optimism,” signaling a potentially bullish outlook. currently, 16.7 million BTC across various addresses are in profit.

Historical data from 2016, 2020, and 2024 indicates that when Bitcoin consistently remains above this key bullish zone, it often triggers significant bull runs, driving prices to new highs within months.

Potential Consolidation: $95K-$90K Range?

Following its rise to $94,900,analysts anticipate a possible cooldown period for bitcoin. Michael van de poppe, founder of MNCapital, stated that after a significant breakout, it is fairly normal to have a slight correction.

Bitcoin has tested its weekly resistance for now, and BTC may drop as low as $91,000.

Anonymous crypto trader Jelle

From a technical standpoint, Bitcoin may consolidate between $94,900 and $88,750 in the near term. Recent price action suggests a period of consolidation following the breakout rally. On the 4-hour chart, the key support zone lies between $90,500 and $88,750, representing a fair value gap.

A break below this range could invalidate the lower time frame (LTF) bullish structure, potentially pushing prices toward the next support area between $84,000 and $86,300, where Bitcoin previously consolidated before its strong positive breakout.

Frequently Asked Questions

What is a Bitcoin long-term holder (LTH)?

An LTH is an investor who holds Bitcoin for an extended period, typically several months or years.

What is a Bitcoin short-term holder (STH)?

An STH is an investor who holds Bitcoin for a short period, often selling quickly in response to market fluctuations.

Why did Bitcoin correct in April?

The correction aligns with historical market cycles, where drawdowns often occur after Bitcoin reaches new all-time highs.

What is the “threshold of optimism”?

It refers to a level of Bitcoin supply in profit that, when consistently held above, often signals the start of a significant bull run.