Key Points
- Bitcoin and gold are thriving amidst market volatility and the US government shutdown.
- Despite the surge, long-term Bitcoin holders have been selling, indicating decreasing market confidence.
The unpredictable crypto market is witnessing a surge, akin to gold, a favored investment option in uncertain times. Bitcoin has achieved a new record high.
The US government shutdown has prompted a transition from the US dollar to safe-haven assets like gold and Bitcoin, as investors forecast a depreciating USD value.
Record Highs for Gold and Bitcoin
On October 2, gold achieved a record high of $3,897 per ounce. In a similar vein, Bitcoin broke to a new all-time high of $125,559 early on October 5, boasting a market cap of almost $2.5 trillion.
Bitcoin currently holds a 58.5% market dominance over the sector’s $4.26 trillion market capitalization, according to data from CoinMarketCap. The fear and greed index from CMC remains in the neutral zone.
Are Long-Term Holders Selling?
The surge in Bitcoin was largely driven by short-term investors. For example, the US-based spot BTC exchange-traded funds recorded $3.24 billion in net inflows last week.
This pushed the total inflows of these investment products above the $60 billion mark. Another factor could be the expectations of what the community calls “Uptober” — referring to a potentially bullish October, triggering FOMO among investors.
However, the Bitcoin long-term holder supply has been on a downtrend since mid-June. According to data from Coinglass, the long-term holder supply dropped from 15.92 million BTC on June 15 to 15.32 million BTC on October 3.
The decreasing long-term holder supply indicates that market confidence in Bitcoin’s future value has been waning, as some investors might be expecting a major price correction.
Furthermore, Coinglass data reveals that the Bitcoin Net Unrealized Profit/Loss indicator rose from 0.51 to 0.56 last week.
While the Net Unrealized Profit/Loss is still in the neutral zone, its rise to the 70 mark could trigger profit-taking among investors, leading to a market correction.
