According to Cointelegraph, Bitcoin (BTC) is approaching a critical juncture as long-term holders (LTHs) are nearing a level of unrealized profit that historically prompts selling. Onchain analytics firm Glassnode warns that if Bitcoin's price continues to rise, it may trigger a significant increase in selling pressure from these older investors. The firm's latest newsletter, "The Week Onchain," highlights that LTHs are currently sitting on nearly 350% unrealized profits, a key historical level that often leads to profit-taking.
Bitcoin's recent surge to multimonth highs is tempting more hodlers, including those with "diamond hands," to consider taking profits. Glassnode's analysis, using various metrics to track investor profitability, indicates that aggregate LTH unrealized profits are approaching 350%. This level is crucial as it coincides with the $100,000 price zone, where LTHs typically ramp up their spending pressure. Glassnode explains that the average LTH is expected to reach a 350% profit margin at the $99.9k level, suggesting an increase in sell-side pressure as the market nears this zone. This area will likely require substantial buy-side demand to absorb the distribution and maintain upward momentum.
Bitcoin's price recently reached $97,500, its highest since February 21, but has since cooled off. Despite being over $20,000 above recent lows, Bitcoin has yet to convince traders of a return to classic bull market behavior. Popular trader TheKingfisher points to order book liquidity as a sign that sellers may counter the recovery. He notes a massive wall of long liquidations stacked under approximately $91k, with shorts above the current price of $96.6k showing barely any significant activity. This imbalance suggests a strong potential downside magnet, posing high risks for longs near current levels, with upside fuel appearing thin.
Glassnode also emphasizes the importance of demonstrating key resistance/support flips, referencing the 111-day simple moving average (SMA) and the aggregate cost basis of short-term holders (STHs). The price has recently surged above these pricing models and is attempting to consolidate within this zone, indicating strength behind the upward swing. However, these levels must be broken and held for further price appreciation, as a rejection would push the price back into bearish territory, returning many investors to a state of meaningful unrealized loss. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
