The recent price surge of Bitcoin (BTC) above the $100,000 USD threshold has been accompanied by a significant decrease in the amount of BTC held by long-term investors. This indicates that some experienced Bitcoin investors are realizing record profits as BTC prices approach the six-figure target.
Actual Profits for Long-Term Bitcoin Investors Reach Record Highs
The chart below shows entities holding Bitcoin for more than 155 days as long-term holders (LTH). Their behavior often reflects changes in market sentiment.
As of December 19, the amount of Bitcoin held by LTH has decreased to $13.31 Bit from a local peak of around $14.23 Bit two months ago, according to Glassnode data.
During the same period, the BTC price has increased from around $58,000 USD to over $100,000 USD, indicating that LTH have been selling at local highs.
Total Bitcoin held by LTH. Source: Glassnode
The Uptrend of Bitcoin Above $100,000 USD Is Not Over
Short-term Bitcoin investors (STH) are absorbing the selling pressure from LTH.
Note that the decline in LTH supply coincides with an increase in the amount of Bitcoin held by STH. The ability of STH to absorb this selling pressure is likely to play a key role in maintaining Bitcoin's price above $100,000 USD.
Total Bitcoin supply held by STH. Source: Glassnode
"The ratio of assets held by these new investors has not yet reached the peaks seen in previous ATH cycles," Glassnode analysts UkuriaOC and CryptoVizArt noted in their weekly report, adding:
"The interpretation here is that the market may not have reached the extreme exuberance and saturation by speculators as in previous cycles."
Bitcoin HODL waves of 24hr - 3 month investors. Source: Glassnode
Another useful indicator to assess the state of the market is the Average Realized Value (AVIV) Ratio, which measures the Medium unrealized profits—or potential gains—that investors are holding.
Based on the profitability of the participants, this metric helps determine whether the market is overextended or still has room to grow.
History shows that bull markets typically peak when most investor types have achieved significant gains. This situation often leads to overwhelming selling pressure, as investors lock in profits while new buyers become hesitant to enter at the elevated prices.
The extreme range of the AVIV Ratio, defined as +3 standard deviations (σ), often signals these overheated conditions. As of December 19, it stands at 1.81, still far from the +3σ (2.3) extreme.
Bitcoin AVIV Ratio Peaks. Source: Glassnode
This suggests that while profits are increasing, the market has not reached the unsustainable levels of exuberance. Therefore, Bitcoin may continue to climb higher before profit-taking and waning demand create a true market reversal.
Bitfinex Expects Mild Bitcoin Price Correction
Analysts at the Bitfinex exchange estimate that Bitcoin's correction will be less severe in the coming months, as increasing institutional demand will gradually push BTC prices to $145,000 USD by mid-2025 or $200,000 USD in the best-case scenario.
As of December 19, Bitcoin exchange-traded funds (ETFs) currently manage over $37 Bit in assets, up from $24.23 Bit at the beginning of November, according to Farside Investors data.
Net accumulation flow of Bitcoin ETFs. Source: Farside Investors
Meanwhile, speculation is growing in the cryptocurrency industry that the incoming Trump administration may establish a strategic Bitcoin reserve for the United States, a move that could push prices to $800,000 USD by the end of 2025.
