Glassnode — BTC Market Conditions Steady

According to the report, Bitcoin's meteoric rise to a new historical peak prompted many investors to take profits, bringing substantial funds into the market. As this activity slowed, it pointed toward an emerging market equilibrium.

The decline in selling activity indicates that less new capital is now needed to maintain price stability. Currently, Bitcoin’s realized capitalization has hit a historic high of $832 billion, increasing by an average of $38.6 billion each month, reflecting consistent capital flow through the network.

BTC Realized Capitalization. Source: Glassnode

Market analysts note a substantial decline in selling activity.

Realized profits, which stood at $4.5 billion in December 2024, have dropped to $316.7 million—a 93% reduction. When combining profits and losses, volumes have fallen from $4 billion to $1.4 billion, a figure that remains historically high and highlights the resilience of BTC demand despite market stagnation.

This trend is confirmed by the Coinday Destruction (CDD) metric, which measures transactions of coins held for over a year. While activity from long-term holders surged at the end of 2024, it has since decreased, signaling a growing commitment among long-term investors.

According to Binary CDD, most investors looking to secure profits have already done so. For a new round of selling to take place, the market would need a clear breakout from the current price range.

Realized Profits and Losses. Source:  Glassnode

Long-term holders are returning to accumulation strategies.

At Bitcoin’s previous $100,000 high, long-term investors were active sellers, which cut down their holdings considerably. Now, with reduced selling activity, these investors have resumed accumulating BTC.

The increase in holdings among this group suggests a growing preference for long-term investment strategies. These investors are hoDLing steady, anticipating a future market upswing.

Centralized crypto exchanges remain pivotal for trading and processing billions in daily transactions. However, the inflow of funds to these platforms has seen a sharp decline, falling from $6.1 billion to $2.8 billion, reflecting decreased trading activity.

Long-term holders (LTH) have scaled back their activity significantly, with exchange inflows dropping from $526.9 million in December to $92.3 million as of January 21, reflecting an 83% decline. This likely indicates that many have already capitalized on recent price levels.

Exchange Inflows Shrinking. Source: Glassnode

In contrast, smaller investors—known as “shrimps” and “crabs” (holding less than 10 BTC)—have been aggressively buying Bitcoin. Over the last month, they’ve accumulated 25,600 BTC, nearly double the volume of newly mined coins (13,600 BTC). This underscores the growing interest from retail investors, even as larger market players remain relatively quiet.

The majority of retail investors are now liquidating their BTC with minimal profits or minor losses, reflecting a market in equilibrium. The big trades that could drive prices appear to have already taken place.

Retail Investors Maintain Interest in BTC. Source: Glassnode

Analysts emphasize that periods of calm often lead to surges in volatility. While the market is stable for the moment, this could be a pause before a dramatic price movement. Preparation is vital.