Bitcoin remains at the top in the crypto market space with a huge 56% market capitalization share. This is huge because if we flash back to November 2022, its dominance was registered at 38%. Thus, this rise in dominance signals growing confidence in Bitcoin, especially among long-term holders who have an increased tendency to accumulate during this period.
According to Glassnode data, the trend to Bitcoin has been accompanied by a change in the digital asset market structure as a whole. Bitcoin dominance has surged, but the second-largest cryptocurrency, Ethereum, has slightly declined its market share, falling from 16.8% to 15.2%. Stablecoins and other altcoins have appeared more expressed declines, with their market shares shrinking by 9.9% and 5.9%, respectively.
Although the whole market has been shrinking since the peak in March of 2024, Bitcoin, Ethereum, and Stablecoins still manage to get a net positive capital inflow. The analysis shows that only 34% of trading days had a larger 30-day USD inflow, which means that these major assets are strong and can survive.
Bitcoin’s Long-Term Holders Stabilize the Market
A closer examination of the market reveals that since the March 2024 all-time high, the sell-side pressure has decreased, which is the first positive data point since June 2023. Long-term holders (LTHs) have consistently been making profits at around $138 million per day, which is a key factor in stabilizing prices despite the market being volatile.
The realized profit/loss ratio of long-term holders shows that the profit-taking activities of these investors are falling, which could indicate that these investors are slowly cooling off. More interestingly, in March 2024 peaks, this ratio reached similar levels to the prior market tops seen in 2013 and 2021.
While the long-term holders keep accumulating, the short-term holder cohort is under pressure due to unrealized losses. The STH-MVRV Ratio sitting below 1.0, the equilibrium level, is an indicator that many recent buyers are now holding their positions at a loss. Under these dynamics, panic selling will ensue once market conditions worsen, thereby increasing the chances of entering into a bear trend.
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