The latest analysis indicates that the unrealized profits of long-term Bitcoin investors are decreasing, even though the BTC price remains near its all-time high.
MAIN CONTENT
Unrealized profits of long-term investors decline even though BTC is near ATH.
The current MVRV ratio indicates average profits of approximately 220%.
Compared to previous peaks, average profits previously reached 300% - 350%.
What are unrealized profits of long-term investors?
Unrealized profits represent the latent profitability when investors have not sold their assets. Darkfrost, a reputable cryptocurrency analyst, emphasizes the downward trend of unrealized profits of Long-term Holders (LTH) amidst Bitcoin maintaining prices close to ATH, as confirmed by CryptoQuant.
The decline in unrealized profits of LTH indicates that buying power and market expectations are adjusting even though BTC prices remain high.
Darkfrost, cryptocurrency analyst, 2/7/2024
Unrealized profits help assess market conditions and determine potential price adjustments, especially for long-term holding investors. A decrease in potential profits may signal a profit-taking phase or increased caution.
What does the MVRV ratio reflect about Bitcoin investor profits?
According to a report by CryptoQuant, the current MVRV ratio of Bitcoin is averaging 220%, down from previous peaks that reached between 300% and 350%. MVRV (Market Value to Realized Value) is a metric that assesses market value relative to actual capitalization, thereby inferring potential profits.
MVRV values below historical thresholds may indicate that the Bitcoin market is cooling off in terms of unrealized profits, suggesting a trend of adjustment or price consolidation.
MVRV is an important metric for assessing market behavior, especially for long-term investors.
CryptoQuant, July 2024 report
Comparing the current MVRV ratio and previous market peaks
Average MVRV Ratio Significance Market Peak 2017 Approximately 300% Very high profits, indicating a strong bull market phase Market Peak 2021 Approximately 350% Indicates record profit levels similar to 2017 but higher July 2024 (Current) Approximately 220% Decreased from the previous peak, warning that the market may adjust
The impact of declining unrealized profits on the current Bitcoin market
The decline in unrealized profits of LTH while Bitcoin prices remain close to ATH indicates that investors are increasing pressure to take profits or adjust their portfolios. This is a crucial phase to assess the next trend of the cryptocurrency market.
Financial experts all agree that a decrease in potential profits is a warning sign for investors, especially amidst many global macroeconomic fluctuations.
Expert opinion on the trend of unrealized profits
As unrealized profits decline, long-term investors need to be cautious and consider their holding or selling strategies.
Nguyen Van Hung, Investment Director of Vietnam Crypto Fund, 15/6/2024
Frequently Asked Questions
What do unrealized profits of long-term investors mean?
It reflects the potential profits that investors have not yet realized, helping to assess the health of the cryptocurrency market.How does the MVRV ratio affect Bitcoin investment decisions?
MVRV below historical peaks signals that the market may adjust, and investors should consider risk management.Why do unrealized profits decline even though Bitcoin is still near ATH?
This indicates that long-term investors are gradually taking profits or reducing profit expectations, warning of caution in the future.What factors is MVRV calculated based on?
MVRV is based on the ratio of the market value of Bitcoin and the actual capitalization, reflecting the effectiveness of profits.What sources is this analysis based on?
Data and insights compiled from CryptoQuant and analyst Darkfrost, updated July 2024.
Source: https://tintucbitcoin.com/bitcoin-loi-nhuan-dai-han-giam-con-220/
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