Bitcoin’s supply-in-profit ratio is very high at the moment, as reported by on-chain analytics firm CryptoQuant on Feb. 28.
It noted that the current ratio is the same as the ratio recorded at the peak of the “echo bubble in 2019” and the beginning of the bull market in 2020.”
Furthermore, it is approaching levels seen during the two market cycle peaks in 2021 when BTC made new all-time highs.
$BTC‘s Supply in Profit Ratio’ is Very High!
“The current ratio is the same as the ratio recorded at the peak of the echo bubble in 2019, the beginning of the bull market in 2020 (Blue circles).” – By @Signal_Quant
Link 👇https://t.co/iDFxjXxdqn
— CryptoQuant.com (@cryptoquant_com) February 27, 2024
Bitcoin Hodlers in Profit
The metric is the ratio of the sum of UTXO (unspent transaction output) value being in profit over the total sum of UTXO value. In simple terms, it is the ratio of Bitcoin holders who have unrealized profits.
It is often used as an indicator to identify peaks and bottoms in the long-term market cycles. It is currently very high at almost 95%, reported CryptoQuant.
This year’s institutional influx could keep the ratio as high as it was in 2017 and 2021, the analysts said before advising that “aggressive investments should be avoided as there may be price dips along the way.”
On Feb. 27, CryptoQuant analysts predicted that BTC prices would rise to $55,000 to $60,000 or possibly form a new all-time high, “after which, the market will go into a correction, at the end of which a bull rally will begin.”
On-chain analytics platform Glassnode observed that the risk appetite for Bitcoin investors is increasing. There are “growing signs of speculation appearing across capital flows, exchange activity, derivatives leverage, and even institutional demand,” it noted.
Bitcoin pioneer Anthony Pompliano commented that Wall Street wants Bitcoin, and there isn’t enough for everyone.
For those wondering why bitcoin is going vertical today, the answer is very simple:
Wall Street likes the orange coin, but there aren’t enough for everyone.
Price has to go up to accommodate everyone.
— Pomp 🌪 (@APompliano) February 27, 2024
Crypto Market Outlook
Crypto markets have gained a further 1.5% on the day to reach a 22-month high of $2.25 total capitalization.
Since the beginning of 2024, crypto markets have gained an impressive 27%, with $480 billion entering the space.
Bitcoin hit a 25-month high of $57,468 in late trading on Feb. 28 and has currently dipped back below the $57,000 level. Moreover, the asset is up 15% over the past fortnight and is just 17.5% away from its all-time high.
Ethereum prices have remained flat on the day at $3,243 at the time of writing. The altcoins are a mixed bag, but Ripple (XRP), Dogecoin (DOGE), and Shiba Inu (SHIB) are all making solid gains.
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