The price of Bitcoin has more than 100 thousand dollars

Bitcoin's (BTC) price rally above $100,000 recently coincided with a significant reduction in the supply held by its long-term holders. This shows that some of the market's most experienced Bitcoin investors are making record profits as BTC price reaches the six-figure milestone.

Long-term gains for Bitcoin have reached a record high

The chart below shows entities holding Bitcoin as long-term holders (LTH) for more than 155 days. Their behavior can often reflect market sentiment.

As of Dec. 19, Bitcoin's LTH held supply fell to $13.31 billion, compared to a local peak of $14.23 billion two months ago, according to Glassnode data.

At the same time, the price of BTC increased from $58,000 to over $100,000, indicating that LTHs were selling their holdings high in the area.

Bitcoin's rally above $100,000 is far from exhausted.

Bitcoin short-term holders (STHs) are moving in to absorb sell-side pressure from long-term holders.

Notably, the decline in LTH supply has coincided with an increase in the supply of Bitcoin held by STHs. The ability of STHs to absorb this selling pressure may have played a key role in keeping the price of Bitcoin above $100,000.

“The amount of wealth held by these new investors has not reached the level that was reached at the peak of the previous ATH cycle,” said Glassnode analysts Yukuriaok and CryptovizArt in their weekly report.

“The implication here is that the market may not reach the levels of speculation and saturation seen in previous cycles.”

Another important measure to assess market conditions is the AVIV Ratio, which measures the average unrealized profit or paper profit made by active investors.

Based on participants' profitability, this ratio helps determine whether the market is overstretched or still has room to run.

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Historically, bull markets have peaked when all categories of investors have made high returns. This situation often results in strong sell-side pressure, as investors lock in profits while new buyers are reluctant to enter at higher prices.

The extreme band of the AVIV Ratio, defined as +3 standard deviations (σ), typically indicates such temperature conditions. As of December 19, it stands at 1.81 below the +3σ (2.3) extreme band.

This shows that the market has not reached a level of unsustainable euphoria as profits continue to rise. Therefore, Bitcoin may continue to rally higher before profit-taking and reduced demand cause a real market reversal.

Bitfinex says Bitcoin's price drop will be easy.

Analysts at the Bitfinex exchange predict that Bitcoin's correction will ease in the coming months, saying that growing institutional demand will eventually push BTC's price to $145,000 by mid-2025, or $200,000 at best.

As of December 19, the Bitcoin exchange-traded fund (ETF) is currently managing more than $37 billion in assets, compared with $24.23 billion in early November, according to data from Farside Investors.

Meanwhile, speculation is rife in the crypto industry that the incoming Trump administration could establish a strategic bitcoin reserve for the United States, a move that could push the price to $800,000 by the end of 2025.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.