Bitcoin Soars to New High, Euphoria Takes Over

Bitcoin has maintained dominance over the crypto market for several weeks now. In the last two months, it has shown an upward trajectory hiting a new all time high record of $73,000.

In the ongoing rally, euphoria has gripped the crypto market. New investors are piling in and driving a wealth shift from long-term holders.

Passing a Major Milestone  

In its latest report, Glassnode noted that Bitcoin's surge above $69,000 marked the "fourth new cycle ATH in history."

This significant milestone has historically triggered a distinct shift in investor behavior patterns, particularly in the balance between HODLers (long-term holders) and speculators.

Wealth Rotation: From HODLers to Speculators

In an ideal bullish market, massive wealth is usually transffred from the traditional olders to young and new investors.

When markets hits new high record, long term holders with vast BTC accumulation who bought at lower prices sell to make profits and realize other gains. 

According to Glassnode, the wealth held by new investots has increased by 138% since October 2023. The increase directly correlates with a reduction of 660, 000 BTC ib the long term holdders supply. 

Influx of New Capital and Demand

The Bitcoin Realized Cap, a measure of the total value of all bitcoins based on their last transaction price, has surged to a new high of $504 billion.

This metric is currently increasing at the rate of $54 billion per month, underscoring the significant capital inflows into the Bitcoin market.

One key driver of this influx is the success and demand for the new spot Bitcoin exchange-traded funds (ETFs) approved by the U.S. Securities and Exchange Commission earlier this year.

According to data from The Block, these spot ETFs now account for nearly 90% of the daily trading volume market share for ETFs offering exposure to BTC.

Profit-Taking and Euphoria

As long-term holders rotate out of their early holdings, the "realized price" – a metric that measures the average price at which coins were last moved – has skyrocketed, moving one standard deviation above its long-term mean.

 This dynamic reflects the healthy balance between distribution pressure and new demand, but also signals the onset of the "euphoria" phase, reminiscent of the 2017 and 2021 bull runs.

The spent-output profit ratio (SOPR) further illustrates this euphoria, showing that current spenders are locking in an average profit of 27%.

New Millionaires Emerging

BTC's latest rally is creating about 1,500 millionaire wallets on a daily basis, highlighting the growing wealth accumulation in the cryptocurrency sector.

While this pace is slower than the 2021 bull run, it underscores the steady growth in the overall number of Bitcoin addresses holding significant wealth, reflecting increasing adoption and acceptance of Bitcoin as a store of value and investment asset.

Looking Ahead

As Bitcoin continues its upward trajectory, analysts have varying targets for its price in 2024 and beyond.

Standard Chartered predicts a price above $100,000 by the end of 2024, while SkyBridge and Fundstrat project prices ranging from $116,000 to $170,000 by April 2025. VanEck maintains a more ambitious medium-term target of $350,000.