Bitcoin is trading less than 2.5% below its all-time high of approximately $112,000, indicating strong momentum. This surge suggests a potential new phase in price discovery. After weeks of gains and consolidation above $100,000, Bitcoin appears poised to extend its uptrend.
On-chain analysis from CryptoQuant highlights the significance of UTXOs (Unspent Transaction Outputs). UTXOs are a core mechanism ensuring each Bitcoin is spent only once. They also provide insights into the profitability of held coins, revealing the market is nearing a 99% profitability threshold.
This means 99% of all Bitcoin holdings are currently in profit. Historically, this level aligns with market euphoria and strong uptrends. However, it can also signal potential overheating and increased volatility if sustained for too long.
Bitcoin's resilience is evident as it approaches new highs this week, trading just below $112,000. While global markets react to rising U.S. Treasury yields and persistent inflation, Bitcoin thrives. It solidifies its role as both a risk asset and a macro hedge amid geopolitical uncertainty.
Analyst Darkfost notes that Bitcoin is approaching the critical 99% threshold for coins in profit. This level is historically associated with market euphoria. However, Darkfost cautions that elevated unrealized profits often precede spikes in profit-taking.
Macro uncertainty, particularly around policy direction, keeps risk-on conviction muted. Darkfost advises caution for late buyers as the market isn't fully euphoric yet. A drop from the 99% profit signal could trigger selling as gains shrink.
For now, Bitcoin remains strong, and the uptrend is intact. The market is closely watching Bitcoin's movements, as it tends to lead during such times.
This article is based on our author's analysis of materials taken from CryptoQuant and insights from analyst Darkfost.