Bitcoin investors and traders are closely watching the market as the digital currency continues its volatile journey. According to data by Glassnode, the UTXO Realized Price Distribution (URPD) shows at which prices the current set of Bitcoin UTXOs were created, providing a valuable insight into the market sentiment.
As of March 20, over 50% of all UTXOs created are profitable, a significant increase from November 21, when the current bottom of this cycle was 23% of all UTXOs in profit. Additionally, 30% of all UTXOs have been bought between $15,500 and $28,000, indicating that various types of cohorts have “bought the dip” at these price levels.
One of the most interesting findings from the data is that the retail cohort, who hold one bitcoin or less, has been the most aggressive during the past four months. This suggests that individual investors are continuing to enter the market and are optimistic about Bitcoin’s future.
Santiment’s latest report reveals that the average returns for long-term hodlers and short-term “new money” in Bitcoin have reached positive territory for the first time in 14 months. The report highlights how this crucial indicator crossover can be used to assess the next bull run in the cryptocurrency market.
CryptoQuant, another data provider, also revealed that the funding rates for open futures contracts in the derivatives market have returned to positive territory after reaching their lowest value since FTX.
The funding rate is an indicator that measures the funding of open futures contracts and translates market sentiment. In general, very negative funding rates signal moments of short squeeze. However, in the last three situations where the rate was very low, there were rapid price reversals, initially driven by spot buying but strongly intensified through the futures market.
While the current funding rate is positive, it remains low, signaling neutrality with a slight supremacy of market optimism among traders of these perpetual contracts. This suggests that traders are not taking strong positions in either direction and are waiting for more clarity in the market before making any major moves.
Overall, the URPD data and funding rates indicate that the Bitcoin market remains volatile and unpredictable. However, the fact that more than 50% of all UTXOs created are profitable suggests that there is still a significant level of optimism among investors and traders. It will be interesting to see how the market evolves in the coming weeks and months as more data becomes available.
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