- Long-term positions continued to reach new highs.
- The confidence of short-term bondholders has shifted to a neutral state.
Excitement was in the air when Bitcoin [BTC] breached the $35,000 mark for the first time since May 2022, the fateful month that sparked the crypto bear market.
How much are 1,10,100 BTCs worth today?
Following BTC’s main pump in 2023, when it recovered from a low of $27.1k to a high of $35.1k, prices have started to consolidate around yearly highs. At the time of writing, BTC exchanged hands at $34,168, marking a weekly gain of 18%, according to CoinMarketCap.
Long-term holders are not deterred
Naturally, a rally of such proportions could have far-reaching consequences for bondholder behavior. According to the latter report on-chain analytics company Glassnode made a significant portion of BTC supply, nearly 4.7 million, profitable.
This made more than 80% of the BTCs in public hands a profit. The percentage supply in the profit oscillator even climbed above the long-term average.
Source: Glassnode
However, the earnings outlook failed to deter the determination of long-term holders (LTH). These users are known as diamond hands or experienced investors. They do not spend their holdings for at least 155 days and are considered to have a high risk tolerance.
This condemnation was reflected again as LTH positions continued to reach new highs. At the time of writing, nearly 14.8 million BTC were in the custody of the LTH cohort.
Source: Glassnode
Interestingly, nearly 30% of LTH supply was underwater, which was considered “historically high,” according to the report. This could be one of the other reasons why the LTH cohort showed more conviction and was less willing to let go of their stock.
Additionally, a look at the Revived Supply metric indicated that fewer and fewer coins were being issued and kept for more than a year. The negative Z-Score reflected a regime of currency dormancy and reinforcement of the bullish narrative.
Source: Glassnode
Short-term holders in a neutral state
While long-term investors remain unperturbed, intriguing insights also emerged from the behavior of short-term (STH) investors. The STH cost basis or the STH Realized Price (STH RP) has recently been breached.
This meant that recent buyers of the coin made an average of 20% profit on their investments.
STH RP has historically served as a reliable support level during strong uptrends. Previous breaches at this level provided significant bullish momentum for Bitcoin.
Source: Glassnode
As indicated, the STH-MVRV Ratio rose above the STH RP after the last rally. Notably, STH-MVRV saw a 10% loss during the August market crash. However, Glassnode called this decline “shallow” in the report, claiming that the correction found good support where it came from during this week’s bull run.
A similar pattern emerged when STH The spent output profit ratio (SOPR) was examined. Please note that unlike the MVRV ratio which tracks unused supply, SOPR looks at coins that have actually moved up chain.
Source: Glassnode
Like MVRV, the STH SOPR entered positive territory after a “shallow” decline in August. Short-term holders made an average gain of 2% on coins issued.
Combining the two models, Glassnode’s analysis concluded that STH’s trust has shifted to a neutral state. This implied that STH spenders have a similar cost base to those who HODLing, a sign of resilience.
Interestingly, STH supply has increased since the beginning of the week. This indicated the entry of new market participants or the existing cohort of STH users adding more to their portfolios. 
Source: Glassnode
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A look at the futures market
Bitcoin’s bull run also impacted futures market positions. Although the Open Interest (OI) increased, it was not boosted by the long position traders.
According to data from Hyblock Capital, the market’s selling volume was higher than buying volume, implying that longs were not entering the market via aggressive orders. Rather, this could reflect the entry of shorts or bearish leveraged traders into the market.
Source: Hyblock Capital
