If Mark Twain were to spin a yarn about this modern-day gold rush, he’d say somethin’ like this: That there’s a little ol’ thing called a metric—soundin’ as fancy as a Missouri moonshine—that proved to be downright insightful back on April 7th, when it hit a measly 0.03, tellin’ us nearly all short-term holders were drownin’ in the muddy waters of loss. That was when Bitcoin tumbled down to a snug $76,000, like a hound dog after a squirrel. Since then, the ratio’s shot up above 9.0—meaning over 90% of those short-term’uns are now swimmin’ in profit—luckier than a Sunday goose at church!
High Feelings Can Signal a Market Shuffle
Now, while a ratio above 9.0 might tickle the wallets and make investors smile, it also has a way of warnin’ us that trouble might be brewin’. When more folks are profit-sittin’ than not, they’s liable to grab their gains quicker than a cat after a mouse, which could make the market top out like a cow at a county fair if demand peters out.
As long as the Short-Term Supply in Profit/Loss Ratio stays above that sweet spot of 1.0, the bullish wind’s likely to keep blowin’. But if it falls and stays beneath that line, it’s a sure sign the current pow-wow might lose steam, and the whole shebang could run down like a riverboat on the Mississippi when the floodwaters recede.
Profit-Takers Are Gatherin’, But There’s Still Room to Hustle
Now, with the short-term folks sittin’ pretty on quite a pile of unrealized gains, it’s liable to cause a ruckus—more folks start takin’ their profits, which might put a cap on demand. Keep your eye on this lively crowd, or you might miss the warning bell of demand runnin’ out.
That recent jump in the Realized Profit of these short-term fellers, now almost +3 standard deviations above what they’ve averaged over the past 90 days, shows folks’ profits are risin’ faster than a kite in a windstorm. But during past rallies up to Bitcoin’s haughty all-time high, this measure topped +5 standard deviations—meaning folks are liable to be whippin’ out their profits with the fervor of a dirt farmer in a gold rush. All in all, it signals that while the guys are makin’ hay now, they might need to pull the reins if they expect the well to run dry.
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2025-05-17 21:16