According to a recent report from Glassnode, the recent surge in Bitcoin (BTC) to a new yearly high has resulted in most hodlers returning to a profitable position.
The blockchain and market data platform revealed that 4.7 million BTC have turned green following the price surge, representing 24% of Bitcoin’s circulating supply.
This surge in asset value coincided with a series of short liquidations totaling 35,000 BTC from the perpetual futures market on October 23, following a similar liquidation of 25,000 BTC on October 17. Glassnode drew parallels between this event and a similar short squeeze in January, which pushed Bitcoin above $20,000 for the first time in months.
Breaking down the data geographically, research firm K33 data showed that whales’ open interest (OI) increased by 26,735 BTC on foreign exchanges, while it increased by 4,380 BTC on CME-managed platforms.
Meanwhile, the options market has seen a significant boom, with open call option contracts surging 80% to $4.3 billion. High open interest in call options is believed to reflect a bullish market sentiment.
Glassnode noted that this is a relatively new development in the Bitcoin market structure, where the options market is now comparable in scale to the futures market.
Glassnode also pointed out that the Bitcoin recovery has pushed it above two important “cost basis” levels, estimated around the price at which typical investors acquired their current BTC holdings.
First, Glassnode’s True Market Mean Price estimate is currently at $29,780. “This model… has historically seen Bitcoin trading above this level for half the time and below it for half the time,” according to Glassnode.
The short-term cost basis for Bitcoin holdings is at $28,000, giving recent average investors a profit of 20%. Despite the profit, Glassnode noted that long-term investors are “not particularly impressed,” with their total holdings breaking an all-time high at 14.899 million BTC.
About 29.6% of this group is currently at a loss, similar to the end of 2015, early 2019, and the market crash in March 2020. Glassnode suggests that this pure hodler group may be “resilient” and “steadfast” compared to previous cycles.
In conclusion, Glassnode stated that the market has surpassed some important levels that can anchor investor sentiment, making the coming weeks crucial to monitor.