There is an injection of new capital into bitcoin. How will it impact the price?

Long-term bitcoin (BTC) investors entered a distribution phase, selling to new holders at higher prices than acquired ones. “This represents an injection of new capital,” says the data provider on-chain, Glassnode, in its most recent market report.

With this new capital flowing into bitcoin, Realized capitalization (value of coins last moved) rose to a new all-time high. This is 540 billion dollars (USD), as shown below. Such a scenario occurs while the monthly capital inflow rate into the asset exceeds USD 79 billion, according to the report.

Realized capitalization of bitcoin. Source: Glassnode.

Glassnode specifies that, given this, now more than 44% of the network’s wealth is in coins less than 3 months old. At the beginning of 2024, its proportion was less than 20%, which indicates that the transfer of wealth from long-term investors to new demand is acceleratinghe maintains.

Meanwhile, he notes that profit-taking continues to dominate overall investor behavior. Such selling pressure currently prevents the price from recovering its all-time high (ATH) of USD 73,700 achieved three weeks ago. Since this milestone, the currency has continued to rise and fall with high volatility until even touching USD 60,000.

Bitcoin’s current distribution is typical of bullish trends

“It is typical in previous bitcoin cycles that an uptick in new demand tends to be accompanied by a high appetite for speculation,” says Glassnode. According to the company, this tends to lead to increasingly volatile marketswhich is characteristic of the currency’s bullish macrotrends.

In fact, he emphasizes that this behavior is what has led to the rise of bitcoin this year. Investor Supply Long-term holders decreased by 900,000 BTC from the peak of 14.9 million BTC set in December 2023. And short-term holders increased by more than 1.1 billion BTC, absorbing distribution pressure.

Amount of bitcoins from long-term investors (more than 155 days) in blue and short-term (less than 155 days) in pink. Source: Glassnode.

Therefore, if new demand increases, it is possible for the price of bitcoin to rise to new heights. As reported by CriptoNoticias, this may be reinforced by the halving scheduled for the second half of April. Such an event, which occurs every four years, reduces the issuance of the currency by half, reducing the selling pressure of miners.

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