Bitcoin’s hot supply has experienced a significant jump to nearly $40 billion as speculative capital flows back into the market amid rising prices. This rise underscores a shift in market sentiment as investors re-engage at price points near $95,000, although signs suggest a full bull market recovery is still a work in progress. Experts caution against potential risks associated with investor psychology, particularly FOMO.
Bitcoin’s so-called “hot supply” has surged to nearly $40 billion as fresh waves of investment enter the market at around $95,000. Just five weeks since its local lows in March, this segment of Bitcoin, characterized by recently-moved coins, has doubled, hinting that speculative capital is flocking back. Industry analysts are keeping a close eye on these movements as new buyers are capitalizing on the price rally, and on April 29, the onchain analytics firm Glassnode released noteworthy findings.
The latest report from Glassnode outlines that the quantity of Bitcoins last transacted within a week has reached its peak since February. This measure, reflecting the activity of short-term holders (STHs), acts as an indicator of new speculative investment. In a stark one-week timeframe, hot supply saw a tremendous rise of over 90%. From a position of just $17.5 billion on March 23, it has climbed dramatically, illustrating not just growth but a significant transformation in market sentiment as well.
As the price nears a historic $95,000, STH investors are cautiously re-entering the market, enjoying profits as they do so. Yet, while new interest grows, it’s crucial to step back and evaluate the broader picture, as highlighted by Glassnode. They released a recent “Market Pulse” piece that suggests we might not yet be witnessing a full-blown bull market.
Even amidst signs of growing hype—identified by metrics such as Percent Supply in Profit hitting 86% and NUPL at 0.53—there’s a noticeable suppression in daily active addresses. This might mean that while transfer volumes and fees are increasing, genuine engagement with the network still appears to be building gradually rather than exploding. Indeed, the need for tempered expectations remains prevalent in conversations about Bitcoin’s future trajectory.
Amidst these developments, experts are also sounding alarms about potential risks, particularly the psychological phenomenon of “FOMO” (Fear of Missing Out), which could complicate Bitcoin’s path to a sustained recovery. As the market stands, analysts are advising caution; an environment of volatility persists, emphasizing the necessity for investors to conduct thorough research before making any commitments in this tumultuous landscape.
