The recent surge in Bitcoin’s price has led to an impressive milestone where more than 97% of Bitcoin addresses are now seeing unrealized gains, according to blockchain analytics firm IntoTheBlock. This significant proportion of addresses “in the money” marks the highest level since November 2021, when Bitcoin reached a record high of approximately $69,000.
A Bullish Sign for the Market
An address is considered “in the money” when the current market price of Bitcoin exceeds the average acquisition cost of BTC held in that address. Currently, with Bitcoin’s price hovering around $65,000, the majority of holders have purchased their coins at lower prices, indicating widespread profit across the network. IntoTheBlock interprets this data as a bullish indicator for the market, suggesting that selling pressure may decrease as fewer holders are looking to sell just to break even.
Reduced Selling Pressure, Increased Market Confidence
The data implies that new entrants to the market are primarily purchasing Bitcoin from those already in profit, potentially stabilizing prices and reducing volatility caused by sell-offs to cover losses. This dynamic could foster a healthier market environment, encouraging more investment and participation in the cryptocurrency space.
The Role of Spot ETFs in Bitcoin’s Rally
Bitcoin’s price increase of 54% this year, building on last year’s 154% gain, is largely attributed to strong inflows into U.S.-based spot exchange-traded funds (ETFs) approved in January. The acceptance of spot ETFs by Wall Street has significantly altered the demand-supply balance, favoring bullish market conditions and potentially setting the stage for Bitcoin to reach new heights. Alongside Bitcoin’s performance, the broader crypto market, as measured by the CoinDesk 20 Index, has also seen a substantial rise of 37.8% this year.
This positive trend underscores the growing mainstream acceptance and institutional support for Bitcoin, hinting at a maturing market that could sustain further growth and attract new segments of investors.
