Bitcoin Rally to $68K Amid Rising Futures Activity Leaves 75% of Short-Term Holders in Profit

The latest Bitcoin recovery push above $68K amid an uptick in futures market activity has caused 75% of short-term holders to be in profit.

Bitcoin recently experienced a significant rally, reaching $68,486 on July 22. This surge has notably impacted Short-Term Holders (STHs), bringing 75% of their supply back into profit. Bitcoin’s recent performance has alleviated financial stress for these investors.

This recovery marks a 28% increase from the July 5 low of $53,550, driven by German government selloffs and Mt. Gox creditor repayments. Despite a subsequent correction following the $68,486 peak, BTC remains strong above $66K. Glassnode’s latest weekly on-chain report indicates multiple metrics improvements.

Short-Term Holders in Profit

Particularly, STHs have seen a notable turnaround. After facing over 90% losses earlier, the recent rally pushed 75% of their holdings back into profit. The STH-MVRV metric, now above the break-even level of 1.0, confirms this recovery. 

Moreover, detailed analysis of the STH-MVRV metric shows positive profitability across all sub-groups, highlighting the rally’s broad impact. The net realized profit/loss metric supports this optimistic trend, showing positive capital flows across most age tiers. The only exception is the 1M-3M cohort.

Improvement in Bitcoin Futures Metrics

Meanwhile, in the perpetual futures market, exchanges like Binance, Bybit, and OKX dominate, holding 84% of total open interest. Futures market dynamics show open interest fluctuating between 220K and 240K BTC, with recent increases to 260K-280K BTC.

Also, Glassnode confirmed that deleveraging events have significantly influenced open interest, often triggered by margin call liquidations. The past year saw ten such events where open interest dropped by over 5% weekly. These events lead to liquidation volumes exceeding $200M/day.

Directional bias analysis during bull market corrections reveals that long-dominant liquidations have recently shaped the market, notably when Bitcoin dipped to $55K. This period saw substantial over-leveraged long positions liquidated, reducing open interest significantly.

The perpetual funding rate metric further highlights market sentiment. A neutral to negative sentiment has prevailed since the March 2024 ATH, with brief positive shifts during attempted rallies. The recent rally from the $54K region showcased over-leveraged long liquidations, maintaining funding rates below the 0.01% neutral level, indicating cautious market sentiment.

Current Bitcoin Position

Bitcoin currently faces resistance after its six-week high. However, the robust rally and improved profitability for short-term investors signal a potentially positive outlook for BTC. As of now, BTC trades at $66,750, reflecting a slight correction from its recent peak.

The daily chart shows strong resistance levels around $70,552 and support around $53,313, as depicted by Bollinger Bands. The MACD indicator shows growing bullish momentum with the MACD line crossing above the signal line. This histogram also reflects strong upward movement.