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The Bitcoin market has yet to reach the unsustainable euphoria typically observed at the peaks of previous BTC price bull runs.
Bitcoin’s (BTC) recent price rally above $100,000 has coincided with a sharp drop in the supply held by its long-term holders. This suggests that some of the market’s most seasoned Bitcoin investors are booking record profits as BTC price climbed toward the six-figure milestone.
Realized profits for Bitcoin longs hit record highs
The chart below shows entities that hold Bitcoin for more than 155 days as long-term holders (LTH). Their behavior can often reflect a shift in market sentiment.
As of Dec. 19, the supply held by Bitcoin’s LTH dropped to $13.31 billion compared to its local peak of around $14.23 billion two months ago, according to Glassnode data.
In the same period, BTC’s price has risen from around $58,000 to over $100,000, indicating that LTHs have been selling their holding at local highs.
Total Bitcoin supply held by LTH. Source: Glassnode
Bitcoin uptrend above $100,000 is far from being exhausted
Bitcoin’s short-term holders (STHs) are stepping in to absorb sell-side pressure from long-term holders.
Notably, the LTH supply’s decline has coincided with the rise in the Bitcoin supply held by STHs. The ability of STHs to absorb this selling pressure has likely played a key role in sustaining Bitcoin’s price momentum above $100,000.
Bitcoin total supply held by STHs. Source: Glassnode
“The proportion of wealth held by these new investors has not yet reached the heights experienced during previous ATH cycle tops,” noted Glassnode analysts UkuriaOC and CryptoVizArt in their weekly report, adding:
“The interpretation here is that the market may not have reached the level of euphoric fervor, and saturation by speculators seen in prior cycles.”
Bitcoin realized HODL Waves of 24-hour—3-month BTC holders. Source: Glassnode
Another useful metric to assess the state of the market is the True Market Deviation (AVIV Ratio), which measures the average unrealized profit— or paper gains—held by active investors.
Based on participants’ profitability, this ratio helps determine whether the market is overextended or still has room to run.
Related: Double-digit drop in Bitcoin profit-taking metric hints it’s ‘ready’ to rally — Analyst
Historically, bull markets tend to peak when nearly all investor categories achieve substantial profits. This scenario often results in overwhelming sell-side pressure, as investors lock in gains while new buyers hesitate to enter at elevated prices.
The AVIV Ratio’s extreme band, defined as +3 standard deviations (σ), typically signals such overheated conditions. As of Dec. 19, it stood at 1.81, well below the extreme band of +3σ (2.3).
Bitcoin AVIV Ratio tops. Source: Glassnode
This suggests that while profits are rising, the market has not yet reached levels of unsustainable euphoria. So, Bitcoin could continue to climb even higher before profit-taking and reduced demand create a real market reversal.
Bitfinex says Bitcoin price drop will be mild
Analysts at Bitfinex exchange estimate Bitcoin correction to be mild in the coming months, stating that growing institutional demand will eventually propel BTC price to $145,000 by mid-2025, or $200,000 in the best-case scenario.
As of Dec. 19, Bitcoin exchange-traded funds (ETF) are currently managing a little over $37 billion worth of assets, compared to $24.23 billion at the start of November, according to Farside Investors data.
Bitcoin ETF cumulative net flows. Source: Farside Investors
Meanwhile, speculation is mounting within the crypto industry over the possibility that the incoming Trump administration could establish a strategic Bitcoin reserve for the United States, a move that could push the price toward $800,000 by the end of 2025.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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