Santiment Report: A Whopping 89% of Bitcoin Investors Currently in Profit

It’s been a whirlwind year for Bitcoin and next year is set to be even more chaotic, with a potential spot ETF approval and BTC halving catalysts for the blockchain’s next era. The hype surrounding these two events has ushered in a late 2023 crypto market rally, with Bitcoin leading the charge. The number-one digital currency has appreciated by 160% over the past twelve months and reached its highest price since April 2022. The question on everyone’s mind is – will next year’s milestones signal the start of the next bull run, or has the market already priced in these events? 

According to Santiment, investors should be a little wary of Bitcoin in the short-medium term. For starters, the crypto Fear & Greed Index is still on the higher side of ‘Greed’, currently reading 74. This indicator, based on market volumes and particularly social media sentiment, has historically been quite accurate when assessing the crypto market. It’s possible that a pullback for certain digital currencies is on the horizon.

However, perhaps even more pressing is that a massive 89% of BTC investors are currently in profit. This is a huge proportion, and the last time this level of profit was seen among HODLERs came in November 2021 (BTC’s all-time-high). This suggests a correction may be on the way in the short/medium-term, as investors secure profits and prepare to load up for the next potential bull run in the next couple of years.

However, the supply in profit metric can also show when coins are underbrought. Typically, buying opportunities come when investors are in the 40-70% profit range, which suggests solid performance but potential for a ‘catch-up’ period. According to Santiment’s report, two coins are currently sitting below the 42% profit-to-supply range – Litecoin (LTC) and Polygon (MATIC).

While these may look like undervalued assets based on this metric, it’s never a good idea to rely on one piece of technical data to inform an investment plan. There’s no use in buying a low-profit coin if the project is without utility and merit! Rather, ensure to use a variety of sources to dictate when it is and isn’t a good time to buy a cryptocurrency.