Bitcoin is staging a comeback, with short-term holders finally seeing green on their investments. According to data from Glassnode, over 75% of these investors are now in profit, a stark contrast to the grim situation just weeks ago when nearly 90% were underwater.
This surge in profitability could be a significant catalyst for further price increases as it typically indicates growing investor confidence and demand. The metric, known as the Short-Term Holder MVRV, has recovered above the crucial break-even point of 1.0, suggesting that short-term holders are now generally in the money.
Bitcoin has also managed to hold above the critical support level of $65,000 despite a recent $3.9 billion futures expiry that threatened to push the price lower. Crypto analyst Rekt Capital believes this successful retest solidifies $65,000 as a strong support level and predicts the price will continue to fluctuate between $65,000 and $71,500.
However, the road to higher prices is not without obstacles. A looming hurdle is the psychological resistance level of $68,000. If Bitcoin manages to breach this level, it could trigger a massive liquidation of over $700 million worth of leveraged short positions. While this could accelerate the upward momentum, the sustainability of such a rally would depend on continued inflows into US spot Bitcoin ETFs.
While these ETFs have been a significant driver of Bitcoin’s recent price appreciation, the inflow rate has been slowing down since July 23. If this trend continues, it could dampen Bitcoin’s ability to sustain levels above $68,000.
As the cryptocurrency market remains highly volatile, investors should approach it with caution and conduct thorough research before making any investment decisions.
While the current bullish sentiment is encouraging, it’s essential to approach the Bitcoin market with caution. The cryptocurrency landscape is notoriously volatile, and price fluctuations can be rapid and substantial.
Experts advise investors to conduct thorough research and consider their risk tolerance before allocating funds to Bitcoin. Additionally, diversifying one’s investment portfolio can help mitigate potential losses in case of market downturns.
