Currently, 16.4 out of a total 19.5 million Bitcoin in circulation are trading above their "starting" price. In other words, 83.6% of Bitcoin in circulation represent unrealised profits for their holders. The last time this level was reached was during the 2021 bull market.

The market has already gone through a bearish phase, where less than 58% of the coins issued were profitable (minus one standard deviation), and is now in a recovery phase that will continue from 58% until 90% of coins are profitable. Between 90% and the setting of a new all-time high (+1 std), a phase of euphoria will take place.

The strength of the current trend is well conveyed by accumulation sentiment, which remains at a maximum across all investors from shrimp (<1 BTC) to whales (≥1000 BTC). This is due to market participants' expectation of a full-fledged rally on the back of the approval of spot ETFs in the US. 

It is also noteworthy that the volume of coins in the hands of short-term holders (STH) hit an absolute low of 2.3 million BTC. This indicates market participant's strengthening faith in a period of protracted growth, many of whom have stopped spending their coins and have therefore moved into the long-term holders (LTH) category of investors. The volume of coins in LTH hands hit an all-time high of 14.9 million BTC.

Despite the BTC price more than doubling in 2023, the number of people willing to part with their coins is vanishingly small. 

If the expectations prove correct, this trend will be met by significant demand from institutional investors, and, come April, a reduction in the per-block mining reward.

Over the past 12 months, capital inflows into exchange-traded funds (ETFs) from institutional investors have already reached $1.2bn, half of which came in the past four weeks. If the ETF is approved, most analysts expect a hundred-fold increase in the indicator.

StormGain Analytical Group 
(platform for trading, exchanging and storing cryptocurrency)

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