30s Summary

Bitcoin’s price recently crossed $100k, prompting many long-term investors to cash out. However, short-term holders are continuing to buy, offsetting the resultant selling pressure. Glassnode data revealed a drop in supply from long-term holders to $13.31bn, down from $14.23bn two months before. Observers noted the absence of a massive influx of new investors and the AVG Ratio indicating the market is not overstretched. Bitfinex analysts predict Bitcoin could reach $145k by 2025. Upward pressure could also come from rumors that the Trump administration might establish a significant Bitcoin reserve for the U.S.

Full Article

Bitcoin, or BTC, recently saw its price soar past the $100,000 mark. At the same time, some of the biggest Bitcoin investors, who’ve had their money in for some time, started cashing out, implying they were grabbing their profits as the price climbed past this significant number.

The graph attached below shows the folks who’ve held on to their Bitcoin for more than 155 days – we call these the long-term holders. Their buying and selling trends are a good way to gauge the overall mood of the market.

As of December 19th, the supply of Bitcoin held by these long-term holders dropped to $13.31 billion, as compared to $14.23 billion just two months ago, as per data from Glassnode. At the same time, Bitcoin’s value went up from about $58,000 to over $100,000, suggesting that the long-term holders are selling off their stash when the price is high.

While the long-timers are selling, the short-timers – those who’ve held Bitcoin for a lesser period – are buying up. Interestingly, as the supply from long-term holders is decreasing, the supply by short-term holders is increasing. This is good news for Bitcoin’s price stability as the short-term holders can help balance out the selling pressure.

Glassnode experts, UkuriaOC and CryptoVizArt, noted that we haven’t seen a massive influx of new investors yet, like we’ve seen in previous high-price cycles. The implication here is that the market hasn’t hit the top-end, full-blown excitement phase we’ve seen in the past.

Another indicator to keep an eye on is the AVIV Ratio. This gives an idea of the average unrealized profit – or potential gains – held by active investors. By looking at how profitable the current Bitcoin holders are, we can figure out if the market has stretched itself too far or if there’s still room for growth.

Historically, super successful markets seem to max out when almost all investor categories are seeing significant profits. When this happens, everyone wants to cash out and bank their earnings, while new buyers are hesitant to enter as the prices seem too high. Bitcoin hasn’t hit that point yet, as per the AVIV Ratio. It stood at 1.81 as of December 19th, well below the ‘overheated’ mark of 2.3.

All these factors indicate that while profits are increasing, the Bitcoin market hasn’t hit unsustainable levels. So, there’s a good chance that Bitcoin could keep getting higher before profit-booking and reduced demand causes an actual market decline.

Bitfinex exchange analysts predict that any dip in Bitcoin’s price would be mild in the near future, and believe that growing demand, particularly from institutions, will push Bitcoin’s price to perhaps $145,000 by mid-2025, maybe even $200,000 in the best-case scenario.

As of December 19th, Bitcoin exchange-traded funds, or ETFs, hold just over $37 billion worth of assets, compared to $24.23 billion at the start of November, according to data from Farside Investors.

Meanwhile, there are some rumors in the crypto world that the upcoming Trump administration might establish a significant Bitcoin reserve for the United States, a move that could possibly push up the price to around $800,000 by the end of 2025.

Just remember, investing and trading always involves risk, so always do your own research and make informed decisions.