Monday, December 6

Bitcoin is in the early stage of a major bull run, according to Glassnode

Key facts:
  • Holders do not seem willing to spend their BTC, waiting for higher prices.

  • Long-term holders are at a profit level of between 50% and 75%.

Despite the recent all-time high in the price of bitcoin (BTC), current levels of profit-taking are moderate and suggest that this cryptocurrency is going through the initial stage of a major bull run, says analytical firm Glassnode in its report. Week On-Chain #44, published this Monday, November 1st.

Glassnode aborda en the report the evolution of the bitcoin market between October 25 and 31, and points out that despite the temporary price decline below USD 60,000, the appreciation of the first cryptocurrency in the month of October reached a record value of 40%. The analytical firm maintains that the total range of the bitcoin price in October was $ 23,205, greater in value than the total price range from the genesis block to December 2020.

Moderate level of bitcoin spent and earnings

Holders’ activity and profit taking after an all-time high in price can provide insight into the health and sentiment of the market, the study notes.

The profitability of bitcoin is measured through SOPR, or rate of profit on exits spent. This is calculated dividing the current price with respect to the realized or effective price; the latter corresponds to the price of BTC the last time it changed hands. Glassnode uses the so-called adjusted SOPR (aSOPR), which discards transactions with coins less than an hour old.

Current on-chain profit-taking levels are mild, considering the all-time high was broken ten days ago, and resemble early bull market activity. It seems that current holders are generally unwilling to move their coins and are expecting higher prices.


The following graph shows the evolution of the bitcoin price and the aSOPR metric. The latter has been above 1 since mid-August, with holders in profit. For this reason, Glassnode speaks of “taking moderate profits”, taking into account all holders.

Rate of Return on Outputs Spent (aSOPR) of bitcoin. Source: Glassnode.

The current area is similar, in terms of the behavior of the aSOPR, to the initial area of ​​the graph, which runs from August to the end of October 2020, also with moderate sales and gains. Then the bull run is accentuated and there are three zones in which profit taking increases.

Two of them are from sustained earnings, highlighted in pink. Between the two is the area shaded in blue, showing the maximum profit taking, after the break of the all-time high of December 2017, which occurred in December 2020, exactly three years after the previous all-time high.

The capitulation zone is then shown on the chart, from the end of May to the end of July this year, in which most of the BTC was sold at a loss. In the current area, it is also highlighted that moderate sales have occurred since August, when there was an upward trend, and also in September, although in this last month there was a negative return of 7%. The highest profit taking, within the moderate range, occurs with the most recent all-time high.

Bitcoin unrealized gains and losses

Glassnode shows another perspective on holders’ earnings through Net Unrealized Profit (or Loss) (NUPL). This metric, filtered for long-term holders (LTH), shows the BTC in the hands of this segment of holders is between 50% and 75% of profit.

The NUPL zone between 0.5 and 0.75 has historically been a crucial pivot for the market. When LTHs firm up and fail to sell, the price goes into a bullish rally in the weeks and months that follow.


As seen in the chart below, there have been four times that LTH’s unrealized gains have been in this range. In late 2013, 2017, and 2020, the aforementioned range preceded an all-time high for bitcoin.

The unrealized earnings of long-term holders are between 50% and 75%. Source: Glassnode.

In 2019, as bitcoin recovered from its low of $ 3,000 at the end of 2018, there was a boost mid-year, but holders gave in to selling pressure and a capitulation occurred.

After the strong correction in May, it appears again, as of October, the same scenario of unrealized gains of LTH between 50% and 75%. With the willingness that LTHs have shown so far to hold onto their coins, we could be in the presence of an imminent bull run.

In a recent analysis of the bitcoin market by Willy Woo, commented on by CryptoNews, the long-term prediction for the price of BTC remained bullish, although the short-term holders (STH) showed, until last week, a slight tendency to taking profit.