Bitcoin (BTC) Price Surge Triggers Profit-Taking by Long-Term Holders

The recent surge in Bitcoin’s (BTC) price has led to a significant change in investor behavior. Long-term holders have started taking profits

The recent surge in Bitcoin's (BTC) price has led to a significant change in investor behavior, according to Glassnode data.

Long-term holders have begun taking profits, pushing the market's realized value to a new all-time high.

Bitcoin realized cap has surpassed $900 billion for the first time

Data from on-chain analytics firm Glassnode shows that BTC's realized cap has now risen above $900 billion. This peak value occurs as investors are locking in gains after holding onto their assets for many months. With many long-term holders in a strong profit position following the latest BTC price rally, it appears that they are beginning to take some of their gains.

Also, the market value to realized value (MVRV) ratio has entered what analysts call the "euphoria zone." The ratio measures whether investors are sitting on unrealized gains, while this zone is a phase where investor profit-taking reaches extreme levels.

This ratio is over 3.2 for long-term Bitcoin holders, like Michael Saylor's Strategy, which just bought 4,020 BTC, signaling that, on average, their coins are worth more than triple the purchase price. Such levels are usually a sign that a market top is approaching, and investors are reducing their risk by selling a large percentage of their holdings.

In addition, the MVRV ratio for those who bought BTC within the last five months (short-term holders) is over 2.0. This finding indicates that these investors are also realizing substantial profits.

Source: Glassnode

The data shows that the last time the MVRV ratio reached such high levels was during the 2021 bull market. Back then, BTC experienced a sharp correction after the MREVR ratio crossed the euphoria zone.

However, despite the potential for volatility, the latest data from Glassnode suggests that the crypto market may be entering a more volatile period.

The legend price, which refers to historical support and resistance levels, has displayed slight gains, in contrast to the BTC price's massive rally. This difference highlights how BTC dominates investor attention, especially through institutional demand with spot Bitcoin ETFs.

This market phase displays the classic cycle of a massive price increase, which causes long-term investors to start securing profits. While the metrics don't indicate that a crash will happen soon, they suggest that the market may be entering a more volatile period.

The bear market for altcoins isn't over yet

Popular crypto analyst Michael Van de Poppe has stated that the bear market for altcoins isn't over yet. However, Van de Poppe noted that there's a strong bearish divergence in BTC's dominance.

This means there's a gradual weakening of Bitcoin's share of the total cryptocurrency market. Hence, the analyst predicts that a shift could be imminent, with altcoins rising in value. Van de Poppe also notes that the dip (circled in red) marks the end of the bear market previously, and a similar turnaround could be near.