Bitcoin's real cap hits $900B as investors take profits. Ethereum lags behind, but altcoins may rise as BTC's dominance weakens.
The recent rise in the price of Bitcoin (BTC) has caused a significant change in investor behavior. Long-term holders have begun taking profits, pushing the market’s true cap to a new all-time high.
The MVRV ratio indicates a potential Bitcoin selloff.
Data from Glassnode shows that $BTC 's true cap has exceeded $900 billion for the first time. This peak value indicates that investors are reaping the benefits after holding their assets for several months. Many long-term holders are in a strong profit position following the latest BTC price rally.
Also, the market value to realized value (MVRV) ratio has entered what analysts call the "happy zone."
The ratio measures whether investors are sitting on unrealized profits, while this zone is a stage where investors’ profit-taking reaches extreme levels.
This ratio is higher than 3.2 for long-term Bitcoin holders, as Michael Saylor's Strategy, which just bought 4,020 BTC, suggests that, on average, their coins are worth three times the purchase price.
Such levels are often a sign that a market top is near. Therefore, investors reduce their risk by selling a large portion of their holdings.
Also, the MVRV ratio for those who bought $BTC within the last five months (short-term holders) is greater than 2.0. This indicates that these investors are also seeing significant returns.
Ethereum falls behind as Bitcoin dominance fuels volatility.
Meanwhile, there hasn't been the same level of momentum for Ethereum compared to Bitcoin. Legend price, which refers to historical support and resistance levels, has shown modest gains, in contrast to BTC price's strong rally.
This difference highlights how $BTC dominates investors' attention,Especially with spot bitcoin ETFs through institutional demand.
This phase of the market represents the classic cycle of massive price increases, which allows long-term investors to start taking profits. While the metrics do not indicate that a crash is imminent, they do suggest that the market may soon enter a more volatile period.
Altcoins await turnaround as BTC dominance ends.
Meanwhile, popular crypto analyst Michael Van de Pope has said that the bear market for altcoins is far from over. However, Van de Popp noted that there is a strong bearish divergence in BTC’s dominance.
This means that the share of Bitcoin in the total cryptocurrency market is gradually weakening. Hence, the analyst predicts that with altcoins increasing in value, a turnaround may be imminent.
Van de Popp also notes that the dip (circled in red) marks the end of the first bear market, and a similar reversal may be imminent.
