investor profitability stays high despite market turbulence

Despite the aggressive market correction, with Bitcoin (BTC) falling to the lower end of the $65,000 region and Ethereum (ETH) trading near $3,500, fundamental market metrics remain optimistic.

Bitcoin, in particular, is trading at $65,217 at the reporting date, down 3.34% last week due to increased selling. Meanwhile, Ethereum has embarked on a recovery path and is currently trading at $3,534, up a weak 0.34% over the past seven days.

Amidst the current market conditions, Glassnode captured sustained market optimism in its latest weekly report. Specifically, the report confirmed that Bitcoin’s price volatility led to sideways movement; This trend is often interpreted as investor apathy.

However, more than 87% of Bitcoin’s circulating supply is still held at profit. This is evident from the unrealized profits held by Bitcoin investors, who are currently witnessing an average unrealized gain of 120%; This level has been seen near all-time highs in past market cycles.

The Market Value to Realized Value (MVRV) ratio, which measures these unrealized gains, shows that the upward trend remains intact and the current stability is within the standard deviation range, underlining significant profitability for investors.

Moreover, the recent market peak resulted in significant profits, especially from long-term holders, which increased the liquid supply of the market. As a result, the market now needs time to absorb this oversupply. This consolidation period maintains balanced market conditions by reducing selling pressure and realized profits.

Bitcoin volume drops sharply

Despite healthy investor profits, Bitcoin trading volumes on the network and on major exchanges have plummeted. This trend shows that speculative activities are decreasing and market instability is increasing.

Short-term investors reduced their foreign exchange deposits compared to the volume seen at the beginning of the year. In addition, long-term investors are operating at a minimal level, indicating a state of equilibrium where significant price changes are required to trigger further market movement.

Most of the cryptocurrencies moved are still in profit, and the average realized gains are significantly higher than the losses. This suggests that demand is sufficient to absorb this pressure as shareholders sell, but not enough for an upward move. This scenario benefits range traders and arbitrageurs more than those looking for directional moves.

Growth in open interest

The futures market reflects a similar trend of open interest growth; it now exceeds $30 billion and is close to its previous all-time high. The majority of these open positions arise from demand-neutral strategies such as cash and carry, which involve profiting from price differences between the spot and futures markets.

Moreover, institutional investors are becoming increasingly active; This is evidenced by the fact that open positions on the CME Group exchange have now increased by $10 billion. However, as in the spot market, futures volumes also decreased.