Long-Term Bitcoin Investors Rack Up Profits

Bitcoin Rally Continues Fueled by New Regulatory Promises

Long-term Bitcoin investors are on a roll, racking up profits in a period marked by market euphoria. After a historic rally that took the price of the cryptocurrency to highs of USD 104,088, the environment is fostered by the recent victory of Donald Trump. The president-elect positioned himself as an ally of cryptocurrencies, promising to relax the regulations that have weighed down the sector.

Currently, this ratio stands at 4.1577, notably above its 365-day moving average. This signals that investors are making significant profits / Checkonchain

Unstoppable Rise of Bitcoin

The enthusiastic market climate is reflected in the LTH-MVRV Ratio, an indicator that measures the profitability of long-term Bitcoin investors. Currently, this ratio stands at 4.1577, significantly above its 365-day moving average. This indicates that investors are making significant profits. This strong momentum, with a growth of 0.3663 points, suggests that the rally could be just beginning, leaving open the possibility that the price of Bitcoin may continue to climb.

When the maximum of the last bull market occurred, the LTH-MVRV Ratio exceeded 12 points, between March and April 2021. Although the market could be heating up, this indicator suggests that there is still upside potential above USD 100,000.

Although it could be a good time to take profits, the last time it occurred, the momentum indicator of the LTH-MVRV Ratio, reached 2.74 points. That occurred at the maximum prices of February 2021. That is, on that occasion the bullish momentum was 6.61 times more than the current one.

Factors that strengthen the market

Trump's recent electoral victory is an essential catalyst. His administration includes several officials who support the crypto ecosystem, generating expectations around a more favorable regulatory framework. Added to this is the expectation of a rate cut by the Federal Reserve on December 18, which could further encourage investments in cryptocurrencies. However, Jerome Powell, president of the FED, recently said that there will be no rush to make these cuts, as he believes that the labor market remains robust and inflation is under control.

Technical analysis: is it time to take profits?

With the LTH-MVRV Ratio indicating heating levels, some analysts warn of a potential risk of a short-term correction. These suggest that this could be a good time for long-term holders to take some profits. The high accumulated profitability could lead many to make sales, generating downward pressure on the price of Bitcoin. However, for short-term traders, this could represent an opportunity to take advantage of a possible market fall.

Looking to the future

The analysis reveals that, although Bitcoin prices are at their highest point, investors must be alert to market fluctuations. Statements from the Federal Reserve and political developments will continue to influence the behavior of the crypto market.

The next few days will be crucial to see if the positive sentiment persists and if new records are indeed witnessed.

The commotion and dynamism in the Bitcoin market reflect a renewed interest and confidence in cryptocurrencies, as investors weigh the dizzying gains against the inherent risks of such a volatile market.

Disclaimer: This news does not represent financial advice and thorough analysis is recommended before investing in cryptocurrencies. Investing in cryptocurrencies may involve losses.