Key Points
- Bitcoin [BTC] has reached a new high of over $109,000, suggesting $100,000 could serve as a new psychological support level.
- Long-term holders may begin accumulating BTC as short-term holders gradually distributed their holdings.
Bitcoin [BTC] has established a new price level above $100,000 for the second time this year, hitting an all-time high of over $109,000. This milestone suggested that $100,000 could potentially serve as a new psychological support level, with bullish market sentiment providing further momentum for price increases.
Exchange of BTC Between Holders
According to insights from CryptoQuant, short-term Bitcoin holders have started selling at a loss, as indicated by the Short-Term Holder (STH) SOPR multiple. This metric compares the Short-Term Holder Spent Output Profit Ratio (SOPR) over 30-day and 365-day periods. Typically, a value above 1 indicates STHs are in profit, while a value below 1 signals losses. Current data shows that STHs are selling at a loss.
Historically, when the STH SOPR turns negative, it often attracts long-term holders (LTHs) to accumulate more Bitcoin. LTHs are considered a highly bullish cohort in the market, as they hold BTC for at least 155 days. This behavior reduces circulating supply, meaning accumulation at this level could positively impact BTC’s price and drive it higher.
Miner Profitability and Price Pump
While long-term and short-term BTC holders are actively exchanging positions, miner profitability has reached new highs despite rising mining difficulty. Mining difficulty is a mechanism designed to maintain the Bitcoin network’s security by ensuring consistent block production over time. As difficulty increases, it becomes harder for miners to process transactions and earn rewards.
According to Glassnode’s Difficulty Regression Model, miners are experiencing approximately 3x profitability. The current cost to mine 1 BTC is $33,900, while BTC’s price at press time stood at $104,900. This significant profit margin could incentivize miners to hold onto their BTC reserves as the asset’s value trends higher.
This behavior, coupled with accumulation by long-term holders (LTHs), reduces BTC’s circulating supply and could pave the way for a potential price surge.
BTC’s current price performance appears to align with historical trends, particularly the bull market rally observed between 2015 and 2018, according to Glassnode data analyzing BTC’s price movements since the cycle low. Based on this metric, BTC has the potential to rally by approximately 562%, or 5.62 times its current price of $104,850.
If this projection holds, BTC could surpass $589,000 by the end of the current cycle, setting a new all-time high for the cryptocurrency. So far, market sentiment remains bullish, reinforcing the possibility of BTC continuing its upward trajectory.