Bitcoin (BTC) is making headlines once again as its realized cap soars to new all-time highs, reaching $891 billion as of May 7, according to data from on-chain analytics platform CryptoQuant. The metric, which calculates the value at which the existing Bitcoin supply last moved on-chain, has been on an upward trajectory since mid-April. This surge in realized cap underscores a significant influx of capital into the Bitcoin market, signaling renewed investor interest and confidence.
Growing Conviction in Bitcoin’s Long-Term Potential
Carmelo Alemán, a CryptoQuant analyst, attributes the rising realized cap to increasing capital inflows, reflecting heightened market sentiment and a growing conviction in Bitcoin’s long-term potential as a financial asset. “This new all-time high in Realized Cap not only reflects a surge in invested capital but also a growing conviction in Bitcoin’s long-term potential,” Alemán noted in a May 7 blog post. He added that the consistent accumulation by both long-term holders (LTHs) and short-term holders (STHs) is laying the groundwork for a potential price breakout as BTC/USD approaches the psychologically significant $100,000 level.
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Profit-Taking and Demand-Side Strength
Despite the positive momentum, market analysts warn that the influx of capital may not be entirely sustainable. Research firm Glassnode highlighted in its recent “The Week Onchain” newsletter that both LTHs and STHs have been actively locking in profits, averaging $1 billion in daily net capital inflows. Glassnode noted that the market has maintained a profit-driven regime since October 2023, with buy and sell-side conditions appearing balanced at around the $100,000 mark. While this dynamic may signal strong demand-side strength, it also raises questions about the longevity of the current rally.
As Bitcoin eyes a return to six figures, market participants are closely watching for signs of a potential breakout or correction, with realized cap serving as a key indicator of underlying investor sentiment and market momentum.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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