Glassnode’s latest on-chain analysis reveals a resurgence of speculative activity in the Bitcoin (BTC) market after months of stagnation. This shift marks a potential change in market sentiment, with both short-term and long-term holders showing increased involvement.

Mt. Gox causes new wave of speculation

Analysts at Glassnode reported the resurgence of speculative behavior in the Bitcoin market after a prolonged period of inactivity and sideways price movements. This renewed activity was fueled by market reactions to an internal wallet consolidation by the Mt Gox Trustee on May 28, 2024. Mark Karpeles, the former CEO of Mt. Gox, confirmed that these moves were preparatory steps for the distribution of 141,000 BTC to creditors, expected to be completed by October.

The report notes that Glassnode’s Point-in-Time metrics provided insight into this event, showing significant movement of coins across transactions on the said date. “A major impact of such a large pool of long-dormant coins being spent is that unfiltered metrics like Realized Cap, [Spent Output Profit Ratio (SOPR)]and Coindays destroyed will show a large spike associated with these Mt Gox coins,” Glassnode’s report details, adding:

“Theoretically, these coins were revalued to a higher cost basis during the wallet management transactions.”

Market seems ready for increased volatility

The analysis highlighted that the majority of Bitcoin investors are currently holding on to unrealized gains, indicating a return of market confidence. Glassnode noted that both short-term and long-term holders have experienced a reset in their Sell-Side Risk ratio, indicating a new-found equilibrium in the market. This condition is typically observed during bull market corrections of new all-time highs (ATHs).

The proportion of coins held by long-term holders at an unrealized loss is minimal, reflecting strong conviction among these investors. In contrast, the analysis highlights that short-term holders are more sensitive to price volatility, with significant investments near the current spot price.

Furthermore, Glassnode’s report suggests that despite recent price consolidation, the market is ripe for increased volatility. The reset of the Sell-Side Risk ratio across both cohorts indicates profit and loss exhaustion within the current price range, indicating potential substantial market movements. This equilibrium phase, coupled with the anticipation of Mt Gox distributions, positions the market for increased speculative activity.


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