As Bitcoin eclipses the $50,000 threshold, the landscape of holder sentiment reveals a significant drop in supply held at a loss, signaling a bullish trend.

Blockchain analytics experts at Glassnode have disclosed a compelling trend: the bulk of Bitcoin holders are currently in profit. An impressive 87% of Bitcoin’s total supply was purchased for less than $48,000, underscoring a burgeoning holder gain. The recent price surge to $50,000—a number last seen in December 2021—means that currently, only a mere 13% of Bitcoin’s total supply is held at a loss.

Market dynamics reveal a stark contrast between short-term and long-term Bitcoin holders. Short-term holders, those who have held Bitcoin for less than 155 days, predominantly acquired Bitcoin at prices ranging from $40,000 to $45,000. On the flip side, long-term holders—defined by a holding period exceeding 155 days—make up the 13% of the supply that is sitting in the red. Despite this, the overall volume of Bitcoin held at a loss by long-term holders is dwindling, currently at approximately 777,000 BTC and edging closer to nil as market prices climb.

Historical data from Glassnode suggests that when long-term holders possess a comparable volume of Bitcoin at a loss, it often aligns with the onset of bull market conditions. The year 2019 stands as a notable exception to this trend. This pattern contributes to the optimistic outlook for Bitcoin’s trajectory as market sentiment improves.

A key indicator of market emotion, the Fear and Greed index, has recently skyrocketed to 79 out of 100 points, a level of optimism not seen since the all-time highs of November 2021. This ‘extremely high’ sentiment is a marked increase from the neutral 52 points recorded in mid-October 2023, which at the time was thought to be influenced by the anticipation of spot Bitcoin ETF approvals.

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