Bitcoin Surges 18% to New All-Time High of $118,856 as Investors Hold

Bitcoin has recently experienced a significant surge, closing at a new weekly high of $109,216 and reaching an all-time high of $118,856. This rally has not triggered the typical investor behavior of profit-taking, with more traders appearing bullish but not excessively so. Market sentiment remains strongly bullish, according to historical trends.

On-chain data reveals that investors are taking an unconventional approach during this rally. Short-term holders (STHs), who accumulated Bitcoin at an average price of $100,315, are now roughly 18% in profit but have yet to sell. These holders typically keep BTC for less than 155 days and are known for quickly taking profits. The SOPR (Spent Output Profit Ratio)—a metric used to measure profit-taking activity—has remained neutral, suggesting STHs are willing to hold longer than usual.

The derivatives market also reflects this restrained optimism. The funding rate currently sits at 0.01, indicating a modest bullish bias with contracts slightly favoring longs but without any signs of extreme sentiment or fear of missing out (FOMO). This further supports the notion that market participants are positioning themselves cautiously, even amid new highs.

When Bitcoin previously broke above $111,980, it left behind what’s known as a Fair Value Gap (FVG)—a zone where orders were left unfilled. Price later revisited that gap, rebounded, but failed to sustain an extended rally due to selling pressure. A similar FVG exists now between $115,222 and $111,980. If historical patterns play out, Bitcoin might retest this zone. However, if selling pressure stays low and both STHs and derivatives traders maintain a bullish stance, Bitcoin could continue its upward momentum. In that case, the FVG may act as a launchpad for the next leg up, potentially pushing BTC beyond its recent all-time high.

Bitcoin’s supply squeeze appears to be emerging in an unusual way. Bitcoin’s availability on exchanges continues to fall, and the dynamic between long-term holder (LTH) accumulation and miner issuance suggests mounting demand. Glassnode data shows that LTHs are acquiring Bitcoin at a faster rate than miners are issuing new supply. This trend points to a strong bid under the market. During periods of high demand, investors typically become more reluctant to sell unless prices are higher—setting the stage for further upward pressure on BTC’s price.