Additionally, Glassnode’s analysis indicated that up to 60% of transaction volume is in what it refers to as “profit domination,” with long-term investors being the most likely to be in the black.
Although the price of Bitcoin (BTC) has been declining recently, new data from blockchain analytics startup Glassnode indicates that up to 75% of Bitcoin addresses are profitable.
Glassnode’s Week-On-Chain report published on Monday, April 11, evaluated the number of Bitcoin wallets that are profitable and discovered that approximately 70% to 75% of addresses are profitable, significantly more than the 45 percent to 50% of addresses during the 2018 bad market.
The Glassnode experts said in response to the findings that the present bear market is nowhere near as terrible as past ones:
“The current bear market is not as bad as previous cycles’ worst moments, with only 25% to 30% of the market at an unrealized loss. It remains to be seen whether additional sell-side pressure would drive the market lower, so drawing a larger portion of the market into an unrealized loss, as previous cycles have done.”
Additionally, the survey indicated that long-term Bitcoin holders, defined as those who have held for more than 155 days, were the least likely to experience a loss. Over 67.5 percent of long-term holders have an unrealized profit, however just 7.88 percent of short-term holders, those who have held for fewer than 155 days, have seen any gains.
Bitcoin is currently trading below $40,000 and has fallen as low as $39,000 in the previous 24 hours, reintroducing the asset into bear market territory. Bitcoin’s future path has some anticipating a decline to $30,000, while others believe dealers are seeking to drive the price above $50,000.
Additionally, the research stated that 58 percent of the Bitcoin network’s traffic is in what it refers to as “profit domination,” a statistic that has not been strongly detected since December 2021.
Glassnode said that bear markets often experience prolonged periods of negative transaction volume, and this turn to profit dominance may indicate that sentiment is shifting, with demand for Bitcoin able to purchase the sell-side.
However, Glassnode argues, “considering the continued struggle of prices, it does signal that demand remains somewhat tepid and that investors are profiting from any market strength that exists.”
The researchers said that since mid-February, the market has seen daily realised profits of approximately 13,300 BTC, while daily realised losses have decreased from approximately 20,000 BTC in January to approximately 8,300 BTC last week.
While a significant fraction of addresses and transactions generate revenue, the overall number of users on the Bitcoin network, and hence the volume of transactions, continues to “languish,” according to researchers.
The network is currently processing roughly 225,000 daily transactions, a level comparable to the weak market of 2018 to 2019. While transactions have increased significantly since mid-2021, the analysts stated that “this is a far cry from the excitement cycle seen during bull markets.”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.