Emily Walker
Recent on-chain statistics reveal that the profits for Bitcoin traders have significantly increased. This article examines whether current gains match the peaks seen during the last market high.
Investors Who Bought Bitcoin 1 to 3 Months Ago Have Seen a 47% Gain
In a recent post on X, Julio Moreno, Head of Research at CryptoQuant, highlighted that unrealized profits among traders have reached considerable levels. The key metric to look at is the “Profit/Loss Margin,” which provides insight into the net profit or loss of Bitcoin investors.
This metric assesses the transaction history of all circulating coins to identify the last transfer price. If that price was lower than the current market price, the coin is considered to possess unrealized profits.
Conversely, coins with a higher last transfer price than the current value indicate a net loss. The Profit/Loss Margin calculates the total profits and losses across the network, reflecting the overall situation.
In this context, we are focusing specifically on Bitcoin traders who acquired their coins between one and three months ago.
Moreno shared a chart detailing the trend in the Profit/Loss Margin for Bitcoin traders over the past year:
The chart indicates that traders’ Profit/Loss Margin has recently risen into a robust positive territory, suggesting that these investors are realizing significant gains.
More precisely, this group has enjoyed a net profit of 47% following a recent price surge. Historically, higher profits among investors suggest a greater likelihood of a market top.
This trend occurs because as investors see larger profits, the temptation to sell increases, particularly among less experienced traders who may panic easily.
Data from the chart reveals that a previous peak in March occurred when this indicator reached about 69%, a level not yet reached in the current rally.
Interestingly, a peak in December of the previous year saw the traders’ profit/loss margin at 48%, only slightly above the current figure.
It remains uncertain whether the Bitcoin price will continue to rise or face a correction as traders may look to take profits.
Current BTC Price
As of now, Bitcoin is trading at approximately $88,800, reflecting an increase of over 16% in the past week.