Long Term Profit Rate in Bitcoin Shocked!

First bitcoin Those who closely follow the cryptocurrency market, especially traders, have easily noticed that the volatility in the BTC price has decreased in recent days. As it will be remembered, for a long time, the thoughts that the BTC price would make a great rise and that it would be very profitable in the long run remained strong. So when we come to the present day, did these thoughts really find a response? Details are here.

Koinfinans.com As we reported, glassnode A new analysis shared by Bitcoin has revealed Bitcoin’s declining long-term return on investment. According to the analysis in question, the profitability of long-term investors has fallen behind the December 2018 period.

This represents the time the market bottomed out during the previous bearish cycle. The report also highlighted some notable data by suggesting that long-term owners sell at an average loss of 42%, according to the SOPR metric.

The report was shared sometime with Bitcoin’s performance, especially in the last three months. Looking closely at the BTC chart, it can be seen that the price has been trying to get rid of the so-called “lower range” for about three months, and we can say that the $25,000 levels are no more than a distant story.

Moreover, BTC’s current range may also explain why long-term holders prefer to go through a long-term strategy. Cryptocurrency The unit has so far managed to maintain a healthy level of volatility in its current range. Therefore, long-term investors exit their positions to avoid missing short-term gains.

Bitcoin miners are among those affected by the shift from long-term to short-term profits. Traditionally, they waited for prices to rise in order to make more profits, but now the situation seems to have changed. Miner reserves have been caught in a cycle of short-term sales, especially over the past few weeks.

Bitcoin miner reserves

Bitcoin miner reserves The pressure on it has caused an overall decline, especially in the last 10 days. An interesting dynamic was also observed between miner reserves and coin reserves.

Coin reserves increased many times when miner reserves fell, creating an inverse relationship. This is because the market sees miner reserve exits as a sell signal.

What Does Bitcoin Offer in the Overall Framework?

Recently, miner reserves also seem to have been heavily impacted by the need for miners to cover their mining costs. Therefore, they have to sell from time to time regardless of the rise or fall in Bitcoin price. We can clearly say that macro factors also come into play when it comes to the price action of BTC.

It is also important to remember that economic factors such as inflation also have a great influence on investment decisions. For example, the prevailing market conditions in the last few months have resulted in a shift from risky assets to risk-free assets.

The effects of inflation have forced many traders to exit other risk assets, especially Bitcoin, and many hold the dollar instead. This is one of the simplest explanations for why the dollar is getting stronger.

It may take months to get inflation under control and this could affect BTC’s ability to bounce back to its previous highs. Conversely, a drop in long-term investor profitability to 2018 levels may indicate that the market is near the bottom of its current bearish cycle.

You can follow the current price action here.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.


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