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After months of stagnation and sideways price action, the Bitcoin (BTC) market is showing the first signs of renewed speculative activity. This development follows a recent false alarm regarding the distribution of the Mt. Gox supply, according to Glassnode Insights.

Mt. Gox on the Move

On May 28, 2024, the market reacted to an internal wallet consolidation by the Mt. Gox Trustee, the legal entity overseeing the 141,000 BTC from the defunct exchange. Mark Karpeles, the former CEO of Mt. Gox, confirmed that the coin movement was related to internal wallet management in preparation for creditor distributions, which are expected to be completed by October 2024.


Glassnode’s Point-in-Time (PiT) metrics provide a detailed view of the Mt. Gox balances, demonstrating that over 141,000 BTC were moved in several tranches on the day of the consolidation.

Capital Flows and Composition

The impact of the Mt. Gox coin movements is evident in several on-chain metrics such as Realized Cap and SOPR, which show significant spikes. These metrics reflect the revaluation of coins to higher cost bases during wallet management transactions.

Glassnode’s entity-adjusted Realized Cap metric filters out non-economical transfers to provide a clearer picture of capital flows into Bitcoin. Currently, the Realized Cap is at an all-time high (ATH) of $580 billion. However, new liquidity inflows have slowed since late April as the market consolidated.

The Realized Cap HODL Waves metric indicates that 41% of network wealth is held by coins younger than three months, suggesting that new demand is absorbing a significant portion of the available supply.

A Long-Term Holders Market

Despite recent sideways price action, a majority of Short-Term Holder (STH) coins are now held in unrealized profit. This is supported by data showing that 56% of the STH supply was in a loss position following a recent market pullback to $58,000.

Long-Term Holders (LTH) remain resilient, with only 4,900 BTC (0.03% of LTH supply) held above the current spot price. This is typical of early bull market phases, where LTHs hold the majority of supply in profit.

Room for Growth

The Sell-Side Risk Ratio, which measures the absolute value of profit and loss relative to the Realized Cap, indicates that both Long and Short-Term Holders have reached a new equilibrium. This suggests that the market is poised for increased volatility in the near future.

For LTHs, the Sell-Side Risk Ratio increased significantly as profits were taken around the $73,000 ATH. However, the current level remains lower compared to previous market cycles, implying that LTHs may be waiting for higher prices before ramping up distribution.

Summary and Conclusion

The first signs of market speculation are re-emerging after a multi-month price consolidation. Both new buyers and single-cycle investors are primarily holding unrealized profits, and only 0.03% of LTHs are in a position of loss. This is typical of the early euphoric phase of a bull market.

Over the last two months, the Sell-Side Risk Ratio for both Long and Short-Term Holders has reset to equilibrium, suggesting that the majority of profit and loss likely to be taken in this price range has been realized. This sets the stage for potential substantial volatility in the near future.

Image source: Shutterstock

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