• On-chain profit metric rose as Bitcoin price rose
  • Net realized profits were positive for 17 days, the longest streak in a year.
  • 74% of Bitcoin supply is profitable, three months after FTX collapsed and bitcoin price fell towards $15,000, dropping below 50% .
  • Volatility Is Rising, But What Really Helps Bitcoin Perform Is Poor Liquidity
  • Great quarter for investors, but risks remain, analysts write

Bitcoin 2022 has been a memorable year for all the wrong reasons, including several ugly scandals that rocked the entire cryptocurrency market and a simultaneous price crash.

But so far this year, it’s been on a recovery trend. Up 71% to close out the first quarter, he’s trading above $28,000 for the first time since June 2022.

The positive sentiment is evident when looking at the on-chain metrics.

Net realized gains hit a one-year high

The net realized profit for all coins, the difference between the price at which the coin moved and the price at which it last moved, has turned positive for the longest time since March 2022, this time last year.

Net realized gains have been positive for the last 17 days. In other words, the coin is moving at a price higher than the price at which it was bought (or the price at which it last moved).

Beyond the 18-day streak of positives from late March to early April last year, we’re back in the fourth quarter of 2021, when Bitcoin was trading at an all-time high, and we’re seeing more like this. Continuity must be checked.

Admittedly, the size of the gains over the past two weeks hasn’t been as large as we’ve seen in previous periods, but the fact that Bitcoin is a positive move after a year out is worth noting.

Three quarters of supply is profit

Another way to see how much has changed is that three-quarters of total supply is now profitable.

Just before Christmas, I report When this number fell below 50%, the majority of Bitcoin supply was in the red for the first time since the brief flash crash in March 2020 when COVID kicked off and financial markets all went wild.

Three months later, things are much brighter, with 74% of total supply profitable.

Stablecoins fly off exchanges, liquidity still low

Interestingly, all this increase in price and profit position has occurred at a time of very low market liquidity.

In yesterday’s detailed investigation, I found that analysis Exchange stablecoin balances have fallen 45% over the past four months and are now at their lowest level since October 2021.

Perhaps it is no coincidence. The market is very thin right now and bitcoin is volatile at its best, making it easy to move aggressively as a result. It also helps explain why the stock market has significantly outperformed the stock market, despite the but it feels like reach).

Again, bitcoin has moved to bitcoin, and recent volatility, even if it has picked up compared to postings during relatively calm periods, has been historically unremarkable. FTX Collapse.

To top it all off, it was a great few months into the year of Bitcoin. This is a welcome reprieve for investors who were completely beaten last year. The on-chain profit metric quickly rose as sentiment improved and the price surged.

But liquidity is low, which is helping the rally, and the economy as a whole presents a lot of uncertainty. Admittedly, this is a great start, but we’re not out of the woods yet.

By Jules

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