Bitcoin’s price has surged by over 200% in the past year, reaching a record high above $73,000 on March 13. This surge has led to a shift in investor sentiment towards euphoria, with wealth moving from long-term holders to new investors, according to market intelligence firm Glassnode.

Bitcoin Breaks Fourth Cycle All-Time High

Glassnode’s recent report, “The Week Onchain,” highlights Bitcoin’s recent milestone of surpassing the $69,000 all-time high set in November 2021, marking the fourth new cycle all-time high in history. Analysts note that Bitcoin’s rally above $72,000 has propelled the current bull run into the ‘Euphoria Zone,’ typically associated with new all-time highs.

Market Sentiment in Extreme Greed Zone

Alternative data indicates that market sentiments are in the ‘extreme greed zone’ at 81, reflecting a state of FOMO among investors as the market continues to rise. This shift in sentiment typically leads to increased speculative activity and wealth transfer from long-term holders to speculators.

Wealth Rotation in Bitcoin Markets

Glassnode observes a classic pattern in Bitcoin bull markets where wealth is transferred from old to young investors. The distribution pressure from long-term holders has increased significantly as Bitcoin reaches new highs, leading to a shift in wealth balance between HODLers and speculators.

Increase in New Bitcoin Wallets

Glassnode data shows a 54% increase in new Bitcoin wallets over a one-month period, correlating with BTC’s 58% gains during the same timeframe. Short-term supply holders have seen a notable increase, with a net expenditure of +810k BTC since November 2023.

Spot Profit-Taking Amid Bitcoin Rally

BTC’s 70% year-to-date rally has prompted profit-taking by long-term holders, counterbalanced by increased demand from short-term holders. Realized profit metrics have spiked to high levels, indicating a start of the ‘Euphoria’ phase as seen in previous bull runs.

Investor Caution Advised

It’s essential to note that this article does not offer investment advice. Investors are encouraged to conduct their own research and due diligence before making any investment decisions.

For more news and updates on cryptocurrencies, investing, and finance, explore Global Crypto News.

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