Bull run for the BTC holders but could there be risks involved
Bitcoin BTC has been going through a bull run finally after a long time now. And has taken over the crypto market with its soaring price. All kinds of investors were able to benefit from this be they long-term or short-term investors.
Bitcoin holding has become profitable for holders of all lengths of time. For the first time in 14 months, Bitcoin price has been soaring this high. As the data from Santiment suggests. This is a positive sign for many in the crypto community, suggesting that this bullish period might stay for longer than ever before. But still, there could be risks involved.
Active addresses on the BTC network
Bitcoin’s recent bull run has attracted significant interest from other investors. With addresses holding 1BTC have started to accumulate large amounts of Bitcoin. This has resulted in larger activity on the network. Making it the third largest network for active addresses according to Artemiz’s Data.
This surge in Bitcoin activity suggests that the network is attracting more investors to it and has more potential to grow.
Inscribed Bitcoin and the Ordinals NFTs resulting from it have contributed a great deal to spike the interest of investors in Bitcoin. As per the data from Glassnode, the increased activity has led to a rise in fees accumulated on the network which reached $37,452.54. This is a 15-month high. Such as users who pay this fee and want to accelerate their transactions. Indicating the growth in Bitcoin demand.
Still, it may be risky
Despite the rise in every aspect of Bitcoin in the market. There still might be some downsides that need attention. As the MVRV ratio of Bitcoin suggests that any Bitcoin holders could sell their Bitcoin merely for profit. And whenever that happened the BTC price will eventually drop.
Not only that the reward the miners were earning for validating Bitcoin transactions has started to decrease already. Thus declining the miner’s revenue. With continuously losing out on profits the miners will eventually start selling their BTC holdings, which can also lead to a price drop. Other factors may also play an important role in the miner’s decision-making process. Such as hash rate difficulty, and the upcoming Bitcoin halving, where the mining rewards are halved,
Investors must be careful as they control the price of Bitcoin. Even if the current market trend is positive, there is a lot of unpredictability surrounding Bitcoin prices. Anything can happen at any time you never know. Which is why it is preferable to exercise prudence when investing in cryptocurrencies.