Bitcoin LTHs Gain $26 Billion as Price Surges 29% in April

Bitcoin long-term holders (LTHs) experienced a significant boost in their collective wealth as the price of Bitcoin (BTC) surged from $74,450 to $94,900 in April. According to data from CryptoQuant, the realized market cap of LTHs increased from $345 billion to $371 billion between April 1 and April 23, marking a $26 billion gain. This sharp increase in the LTH realized cap indicates that long-term holders are being rewarded for their resilience through recent market drawdowns.

Bitcoin underwent a 30% correction between January and early April, a pattern that aligns with historical market cycles. Data from past cycles in 2013, 2017, and 2021 shows that such drawdowns are common after Bitcoin reaches new all-time highs, often shaking out weaker hands before resuming its upward trend. This historical context suggests that the recent correction is part of a normal market cycle rather than a cause for concern.

Several factors contributed to the confidence of LTHs during the correction period. Bitcoin's growing decoupling from traditional markets, particularly as US equities faced pressure, improved its investment appeal. While stocks tumbled, gold prices surged to new highs, reflecting investor demand for non-correlated assets. This trend likely boosted LTHs' confidence in Bitcoin's store-of-value narrative.

In contrast, short-term holders (STHs) returned to profit this week but many sold at a loss during the April drawdown. This behavior reflects their tendency to rotate positions under market stress, a recurring trend in 2024 where STHs frequently sold to LTHs during corrections. The supply of Bitcoin in profit market bands signals a bullish outlook, as the total supply in profit increased above the “threshold of optimism.” Currently, 16.7 million BTC in various Bitcoin addresses are in profit.

Historical data from 2016, 2020, and 2024 shows that when Bitcoin consistently holds above this key bullish zone, it frequently sparks significant bull runs, driving prices to new highs within months. This historical pattern suggests that the current market conditions are favorable for a continued upward trend in Bitcoin's price.

Following its rise to $94,900, analysts expect Bitcoin to potentially undergo a cooldown period. Michael van de Poppe, founder of MNCapital, mentioned that after a massive breakout, it is “fairly normal to have a slight correction.” Similarly, an anonymous crypto trader pointed out that Bitcoin has tested its weekly resistance and may drop as low as $91,000. From a technical perspective, Bitcoin may consolidate between $94,900 and $88,750 in the coming days. Recent price action suggested a prolonged cooldown following its breakout rally. On the 4-hour chart, the key support zone lies between $90,500 and $88,750, representing a fair value gap.

A breach below this range could invalidate the lower time frame (LTF) bullish structure, potentially driving prices toward the next support area between $84,000 and $86,300, where Bitcoin previously consolidated for a week before its strong positive breakout. This technical analysis suggests that while a cooldown period is possible, the overall market structure remains bullish for Bitcoin.