Bitcoin Short-Term Holders Realizing Much Fewer Profits Lately

New data indicates that Bitcoin investors who acquired their coins within the past 155 days have recently realized significantly lower profits. These investors are known as the “short-term holders” or STHs. In a post on X, CryptoQuant author Axel Adler Jr explained that the realized profit of short-term holders has decreased by 32%. This indicates that investors are reluctant to lock in profits at the current levels, anticipating further growth.

Source: @AxelAdlerJr on X

Statistically speaking, the longer someone holds onto their Bitcoin, the less likely they become to sell it. Since STHs have only recently entered the market, they tend not to hold for extended periods. This group often panics and sells when major events occur, such as price rallies or crashes.

The recent surge in Bitcoin’s price toward its all-time high saw many of these fickle STH investors selling off to cash in their profits. A chart tracking the “Realized Profit and Loss” for this group peaked at 42% during the height of this profit-taking spree.

However, as Bitcoin’s price has struggled recently, this metric has dropped sharply to just 10%. According to one analyst, this 32% decline signals that STHs lack the desire to lock in profits at current levels. They likely anticipate further price growth in the times ahead.

In another potentially bullish sign, the total capital deployed by investors holding Bitcoin for under a month has started rising once more. Known as the “Realized Cap,” this metric had previously been declining even for STHs, suggesting waning fresh demand for the cryptocurrency.

New Investor Demand Signals Optimism for Bitcoin

The reversal in Realized Cap for these newest investors could indicate that some new demand is flowing into Bitcoin again. While short-term holders aggressively took profits during the recent rally, their pullback from selling lately may hint at expectations of higher prices.

Overall, while past behavior saw STHs cash out swiftly, their current lack of profit-taking could signal beliefs that Bitcoin has further upside. These metrics suggest a cautiously optimistic outlook combined with the increasing demand from new investors.

At the time of writing, Bitcoin is trading at around $69,200, down over 1% in the past seven days.

Source: TradingView

Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.