The recent analysis by industry analytics provider Glassnode indicates a significant shift in the behavior of long-term holders of Bitcoin. They have started distributing BTC and selling to new investors at higher prices. This activity has led to an injection of new capital into the asset class, ultimately increasing the realized cap to new heights.
However, it is essential to note that this analysis was conducted as Bitcoin approached its all-time high for the second time and before markets began to retreat this week. With BTC experiencing a peak price of $73,734 on March 14, followed by a pullback and a subsequent struggle to surpass resistance levels, the market has shown signs of volatility. Despite this, the realized cap has reached a new all-time high of $540 billion and continues to increase at a rapid rate.
Glassnode’s analysis using the Realized Cap HODL Wave metric highlights the distribution of USD-denominated wealth across different age bands. There has been a noticeable increase in coin-ages younger than three months, with newer investors now owning approximately 44% of the aggregate network wealth. This shift in investor behavior patterns indicates that long-term holders are currently in their distribution cycle, realizing profits, and satisfying new demand at higher prices.
According to Glassnode analyst ‘Checkmatey,’ the realized cap is climbing due to old coins being revalued higher, both from GBTC and from HODLers selling. Additionally, Santiment’s report suggests that the belief in Bitcoin being in a bull market has not significantly diminished based on social sentiment. Although the total market cap has decreased by 3%, it is still around 15% lower than its previous all-time high in November 2021.
In contrast to Bitcoin’s movements, altcoins have yet to show significant movement in this market cycle. Despite a few pumped meme coins, most altcoins are currently in the red. Ethereum is down 2% at $3,300, XRP has lost 2.5% falling to $0.584, and Dogecoin dropped 3% to $0.185. This lackluster performance in altcoins suggests that the focus and interest of investors remain primarily on Bitcoin.
Overall, the data and analysis provided by Glassnode and other market analytics firms point towards a dynamic and ever-changing landscape in the world of Bitcoin investments. As new investors enter the market and long-term holders adjust their strategies, it is crucial to monitor these trends closely to make informed decisions in the volatile cryptocurrency space.