On Wednesday, Bitcoin, the leader in the cryptocurrency field, broke through the $93,000 mark, setting a new record high. What is worrying and confusing is that mainstream altcoins still failed to keep up with the rise of BTC, but instead fell sharply again when Bitcoin pulled back. The bull market is still a one-man show for Bitcoin.
Although analysts at Glassnode, a well-known analytical institution, believe that Bitcoin’s upside potential has not yet been fully unleashed, they also warned that if historical patterns repeat themselves, Bitcoin may experience a significant correction in the near future.
Glassnode pointed out in its in-depth report on Tuesday that Bitcoin, as the largest cryptocurrency by market value, has entered a new stage of price exploration, with the continuous highs making almost all the Bitcoins in circulation in the market profitable. On Wednesday morning, the price of Bitcoin climbed to a historical peak of $91,902, with an astonishing year-to-date increase of 118%.
Analysts looked back at historical data and found that such stages lasted about 22 days on average, and were often followed by a sharp correction, when about 5% of the circulating bitcoins might fall below the cost line.
They further observed that the current rally has been running steadily in a high-profit range for about 12 days.
At the same time, analysts also pointed out that Bitcoin's monthly profits usually ranged from $30 billion to $50 billion before the previous peak demand ended and the rise slowed down. However, since Bitcoin entered this latest record high exploration phase, its monthly profits have remained at about $20.4 billion, far below the historical peak.
Analysts wrote in the report: "Despite significant profit-taking, it has still not reached all-time high levels, which indicates that Bitcoin is still likely to continue to climb before potential demand reaches saturation."
In addition, Glassnode analysts also highlighted another important indicator: the average cost basis for new or short-term investors is currently about $66,800, while the upper and lower limits calculated based on the standard deviation of the statistical data are $94,900 and $51,600 respectively.
Analysts warned that once Bitcoin prices approach the $94,900 ceiling, it could mean that "strong demand momentum is waning and prices are high enough to prompt many existing holders to increase their selling."
The views expressed in this article represent only the author’s personal views and do not constitute investment advice. The author does not make any guarantees about the accuracy, completeness, or timeliness of the information in the article, nor is he liable for any losses arising from the use or reliance on the information in the article.
