Bitcoin Surges 2% to $109,716, Unrealized Gains Hit $1.2 Trillion

Bitcoin has surged above $107,000, pushing the vast majority of investors back into profit. According to blockchain data platform, the total unrealized gains have reached a staggering $1.2 trillion. The coin is currently trading at $109,716, marking a 2% increase over the last 24 hours. The overall market is experiencing an uptick, with nearly all coins in the green.

Both the Market Capitalization and Realized Cap measures have shown substantial growth this cycle. The former surged from $304 billion to $2.13 trillion, while the latter jumped from $400 billion to $955 billion. This highlights not only the significant capital inflows into Bitcoin but also its maturation toward becoming a multi-trillion-dollar asset.

The total unrealized profit currently stands at $1.2 trillion, indicating the substantial value appreciation that BTC investors have seen. This also suggests the potential for sell-side pressure if sentiment shifts. The average paper gains (losses held by the average market participant) stand at +125%, indicating that BTC investors are sitting on significant profits. However, this number is still lower than the +180% profitability seen in March 2024 when the price hit the all-time high of $73,000 and December 2024 when it hit $107,000.

Despite the recent drops, investor profitability has not been significantly impacted. Valuation frameworks show positive profitability across holders of all coin ages. The market jump comes after several days of consecutive, albeit relatively minor, decreases that followed geopolitical tensions in the Middle East. The decrease in tensions between the two countries helped stabilize market sentiment and fuel price recovery.

Analysts note that the market’s ability to hold the Short-Term Holder cost basis during such a volatile and uncertain period is a constructive signal. This suggests that the bulls are still in control, and that underlying momentum may remain skewed to the upside. However, the risk of further downside remains due to geopolitical headlines influencing the crypto market.

Gadi Chait, Head of Investment at a prominent bank, noted that Bitcoin’s on-chain metrics continue to showcase the strength of its current market position. The rise in BTC supply in profit reinforces the bullish recent momentum. However, he warns that elevated levels of profit are often followed by increased market volatility. Historically, when such a high percentage of supply sits in profit, the chances of profit-taking rise, introducing short-term market movements even when there is a broadly optimistic outlook.

Despite the surge in profitability, investor behavior shows a strong preference for holding. The current price range seems insufficient to trigger significant profit-taking. Several metrics show this, namely declining realized profits, a downtrend in Liveliness, and Long-Term Holder supply hitting a new all-time high. The decline in sell-side pressure can be seen in the total supply held by the Long-Term Holder cohort, which reached a new all-time high of 14.7M BTC. This underscores that holding remains the dominant market behavior amongst investors, with accumulation and maturation flows significantly outweighing distribution pressures.

The behavior of Long-Term Holders further reinforces this argument. After a brief uptick in sell-side pressure into the all-time high, this cohort slowed their spending as well. The Liveliness metric saw significant upticks during the two previous BTC price all-time high formations, suggesting that spending activity and profit taking took over the market. Yet, during the latest all-time high formation, Liveliness trended downward, reinforcing that holding remains the dominant behavior among investors, and that a range expansion in price may be necessary to incentivize renewed spending activity.