BTC Profit Nears 90% with Anticipated Bitcoin ETF Approval

• Bitcoin Holders See Profit as Value Surpasses $46,000 in Anticipation of US ETF Approval
• Bitcoin's Remarkable Rally
• Warning of Potential Sharp Price Decline
• Potential Market Correction
• The Next Resistance Point for Bitcoin

Bitcoin Holders See Profit as Value Surpasses $46,000 in Anticipation of US ETF Approval

Bitcoin$42,260 -0.64% (BTC) saw an increase in the value, with prices soaring past $46,000. This growth occurred amidst the growing expectations of the U.S. spot exchange-traded fund (ETF) being approved. According to data from CryptoQuant, close to 90% of the current Bitcoin supply being held is profitable. This is a significant rise from the less than 50% recorded at the beginning of the previous year.

Bitcoin's Remarkable Rally

Bitcoin experienced an impressive rally, recording a nearly 160% rise in 2023. Over the last six months, it has gained 50%, a trajectory primarily fueled by the anticipation of the U.S. Securities and Exchange Commission greenlighting an ETF. This surge in Bitcoin's value has resulted in substantial profit for long-term investors, commonly referred to as HODLers. One noteworthy illustration is El Salvador, which recently reported a $13-million profit from its bitcoin investment due to this rally.

Warning of Potential Sharp Price Decline

Despite these positive developments, CryptoQuant analysts cautioned in a recent report about the potential risks. They pointed out that the high unrealized profits among bitcoin holders might trigger a sharp decline in the currency's price. This warning comes even as the increasing demand for the Grayscale Bitcoin Trust (GBTC), coupled with the rising trading volumes, suggests strong anticipation for the spot ETF approval. GBTC, which has sought approval to transition into an ETF, is witnessing a narrowing discrepancy between its share price and net asset value.

Potential Market Correction

CryptoQuant proposed a scenario where a market correction could potentially occur if Bitcoin attains a value of $48,500, which happens to be the average unit price for those who have held the cryptocurrency for between two to three years. They suggest potential support levels of $34k and $30k in such circumstances. A market correction is typically defined as a decline ranging from 10% to 20%.

The Next Resistance Point for Bitcoin

CryptoQuant suggested that the next resistance point for Bitcoin, based on network valuation metrics known as the Metcalfe band, is set at $55,000.

Edited by Jonathan Stoker