Bitcoin’s Struggle for Momentum Amid Rising Profitability
Bitcoin, the leading cryptocurrency, is currently grappling with challenges in gaining upward momentum following a recent downturn in the overall market. It faces formidable resistance at the crucial $103,000 mark. Despite these price challenges, the profitability of Bitcoin has seen an upturn, with a substantial portion of the coins now yielding profits for their holders.
A Noteworthy Increase in Bitcoin Profitability
Renowned technical analyst and verified expert, Axel Adler Jr., has observed a promising shift in the dynamics and sentiment surrounding Bitcoin’s market. Despite a recent dip in Bitcoin’s price, there has been a remarkable surge in investor profitability.
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In a recent post, Axel Adler highlighted that the volume of Bitcoin held in profit has experienced a significant increase. On-chain data reveals an uptick of 5.9 million BTC, raising the total number of profitable coins to approximately 19.7 million. This boost in profitability has been sustained for several months, particularly since September, when Bitcoin embarked on a strong rally towards new price peaks.
It’s important to note that the supply of Bitcoin in profit had previously dropped to 16.5 million BTC during a recent price decline below $90,000. In essence, around 3.2 million BTC transitioned from profit to loss when the price fell from $109,000 to $89,000. Nonetheless, the figures have rebounded as Bitcoin has slightly recovered from this notable decline.
This increase underscores Bitcoin’s robust price movements in recent months. It also signals a resurgence in investor confidence, as a significant portion of Bitcoin’s supply is now valued above its initial acquisition cost.
On-Chain Data and Investor Confidence
Historically, such favorable developments have led to reduced selling pressure, enabling Bitcoin to gather upward momentum. If this positive trend persists, it could ignite buying interest among investors, potentially setting the stage for bullish trends in the near term.
As profitability rises, Alphractal, a sophisticated investment and on-chain data analytics platform, has revealed that a substantial majority of Bitcoin wallet addresses are currently in the green. Recent statistics indicate that over 95.2% of Bitcoin wallets are still profitable, while a mere 2.707% are currently at a loss. This small percentage of Bitcoin at a loss reflects purchases made above the current price level.
Alphractal conducted an analysis of the 7-day Active Supply of newly purchased Bitcoin for a deeper understanding of the situation. Historically, this metric has shown spikes during price peaks or periods of high volatility, suggesting growing interest from both retail and institutional investors in key areas.
Is Bitcoin’s Upside Momentum Building?
Currently, Bitcoin is exhibiting a remarkable resurgence in price as it reclaims the pivotal $105,000 level. Market expert Daan Crypto Trades has noted that “Bitcoin is on track to close its highest monthly candle ever,” signaling a potential continuation of the bullish trend.
However, the high average exposure to underperforming altcoins has led to a shift in sentiment in the opposite direction. Despite this, Daan Crypto Trades continues to view Bitcoin as the dominant force in the cryptocurrency world, as it continues to set new highs, indicating that the bull cycle remains intact.
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