Bitcoin: Why new investor confidence could drive prices higher 

• New Bitcoin investors are showing more resilience compared to past bearish trend.
• New Bitcoin investors are sitting on minimal losses as BTC holds levels above $60,000.

Bitcoin [BTC] has made a solid recovery since the U.S. Federal Reserve announced a 0.5% drop in interest rates.

Recently, BTC reached a five-week high above $64,000, and while it has since retreated to trade at $63,685 at press time, bullish signs continue to emerge. 

Per Glassnode, traders who bought Bitcoin in the last 155 days or less are showing a higher “degree of resilience” compared to past market cycles. 

New Bitcoin investor behavior 

Short-term Bitcoin holders tend to cause short-term price volatility as they are more reactive to price movements.

In the last five months, BTC prices have oscillated between $71,000 and $49,000, suggesting that a significant number of new investors who purchased at the high prices are underwater. 

According to the New Investors Confidence in Trend metric by Glassnode, short-term holders are showing confidence and deviating from previous patterns where they tend to panic during bearish trends. 

The reason behind this shift in sentiment is that the magnitude of losses suffered by this group has been relatively low.

Source: Glassnode

A look at the Bitcoin Realized Price by Age Bands on CryptoQuant also shows that traders who have held BTC for not more than three months have been above their purchasing price since prices crossed above $61,000. 

Additionally, those who have held Bitcoin for 3–6 months will break even once the price crosses $66,500. This data further shows that short-term holder losses are minimal. 

Source: CryptoQuant

Per an earlier analysis by AMBCrypto, short-term holder profitability could be the key to BTC breaking above $70,000. 

Shift in the Futures market

The Bitcoin Futures markets showed an uptick in activity. Since BTC broke above $60,000 on 17th September, Funding Rates have spiked, and have been predominantly positive. 

This means that long traders betting on further price increases have outnumbered short sellers. These traders are willing to pay a premium to maintain their long positions, which shows bullish sentiment. 

Source: CryptoQuant

Data from Coinglass further shows a bullish bias as long traders dominate.

Read Bitcoin’s [BTC] Price Prediction 2024–2025

At press time, 52% of traders held long positions while 47% were holding short positions, indicating that fewer traders are predicting that the prices will drop. 

The positive sentiment is also seen in the Bitcoin Fear and Greed Index which has recovered from a state of fear to neutral, further shedding light on market confidence.