Analysts at blockchain data analysis agency Glassnode said in their latest on-chain report that Bitcoin holders have an average unrealized profit of about 120%, but "investor boredom" still dominates the entire market.
Bitcoin’s price has been largely sideways over the past few weeks, with the currency hovering around $65,300 at press time, however, investors’ profits have remained considerable during the volatility. Glassnode found that the average unrealized profit margin per Bitcoin currently held by holders is around 120%, which is similar to what was seen previously when the market was at all-time highs. Additionally, over 87% of Bitcoin’s circulating supply is currently in profit as the market consolidates within this trading range.
Source: Glassnode
The Glassnode report notes that after achieving new all-time highs, the market usually needs ample time to sort out and digest the excess supply introduced. This will lead to a decrease in realized profits and seller pressure as equilibrium is established. Analysts said that while this has reduced the market's overhead resistance, it has not yet translated into significant price momentum.
Source: Glassnode
Glassnode attributed the sideways price movement to "investor boredom and apathy," noting that the size of Bitcoin network transactions has slowed, indicating a decline in speculative interest. Glassnode concluded in the report:
“An equilibrium between demand and sellers appears to have been established, resulting in relatively stable prices and a noticeable lack of volatility. This lull in market movement translates into a degree of boredom, apathy, and indecision among investors. Historically, This suggests that a decisive price move in either direction is necessary to trigger the next round of market activity.”
Potential supply pressure on altcoins
Many altcoins are experiencing significant declines, and digital asset research agency 10x Research analyzed the top 115 coins and said that the average price of cryptocurrencies has fallen by 50% from the highs in 2024. Markus Thielen, founder of 10x Research, believes that unless the liquidity of cryptocurrencies improves, these losses will be more severe.
Thielen mentioned that Bitcoin and Ethereum (ETH) have performed relatively well during this period, falling approximately 11% and 13% respectively, which may benefit from smarter traders converting other altcoins into these two coins, This has happened in the past two cycles.
The#AltcoinBear Market: A Harsh Reality for Most#Traders-> https://t.co/5vow0cQH5B pic.twitter.com/XGoEhp8VrA
— 10x Research (@10x_Research) June 19, 2024
Cryptocurrency analyst Miles Deutscher said that the number of tokens in the cryptocurrency market is now more than 5 times that at the peak of the bull market run in 2021. The reason for the difficulty. He wrote on the X platform:
"The more tokens are launched, the greater the supply pressure accumulated in the market. And this supply pressure will "stack". Many projects in 2021 are still being unlocked, and the supply will "stack" to each subsequent year (2022, 2023 , 2024).
Over the next month, more than 40 cryptocurrency protocols are expected to unlock tokens worth approximately $740 million, Unchained reported, citing data from Token Unlocks.
In Deutscher’s view, token dilution is equivalent to the impact of inflation on traditional financial assets, reducing the purchasing power of cryptocurrencies across the board. He noted that some solutions to this problem might be to enforce better token distribution at the exchange level and prioritize allocating more tokens to the genuine user community.
The more tokens that launch, the more cumulative supply pressure on the market.And this supply pressure "stacks".Many projects from 2021 are still unlocking, with supply "stacking" across every subsequent year (2022, 2023, 2024).
— Miles Deutscher (@milesdeutscher) June 18, 2024
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This article Glassnode: Bitcoin holders have 120% average unrealized profits, but “boredom” still dominates the market first appeared on Zombit.
