BTC surges by 9.99% but 5.1 million addresses remain underwater

• 5.1 million addresses remain underwater despite recent Bitcoin’s rally.
• BTC has surged by 9.99% over the past week.

Bitcoin [BTC] has experienced a strong upswing on its price charts over the last week. Although BTC started September on a negative note, the recent gains have outweighed the monthly losses.

In fact, as of this writing, BTC was trading at $63,668. This marked a 9.99% surge over the past week.

Also, on monthly charts, it has made considerable gains surging by 6.99%. Since making lower lows, of $52546 on 6th September, it has recovered from all the previous losses.

Despite the recent uptick, Bitcoin still remains significantly below its recent high of $70016 recorded on 29th of July. Therefore, the sudden price movement has left analysts talking.

Inasmuch, IntoTheBlock analysts remains skeptical of the recent rally citing 5.1 million addresses that remain underwater.

5.1 million BTC addresses remain underwater

Source: X

According to IntoTheBlock, although BTC is making a strong effort to break through $63k resistance, many investors remain at a loss. Based on this analysis, there are 5.1 million addresses that are in loss at the current market price.

What this simply means is that 5.1 million wallets are holding BTC at a loss suggesting they purchased at a higher price than current rates. This implies that the investments have not yet recovered.

Such scenario suggests that a significant number of investors are waiting for  prices to rise further before breaking even or making a profit. When the market is like this, investors can either sell at a loss to avoid further losses or hold until they realize the profit.

If they decided to sell, these addresses could create selling pressure.  It’s possible to sell once they recover their losses thus slowing down the upward momentum. Subsequently, they can hold further anticipating more gains.

Prevailing market sentiment

While the metric highlighted by IntoTheBlock offers reasons to worry over the recent rally, the broader market has shown resilience over the past week.

Source: Cryptoquant

Over this period, Bitcoin has experienced a significant decline in Net unrealized loss. NUL has declined from 0.026 to 0.009 this indicates that the market is recovering and many participants are seeing their holdings approach break even or turn to profitability.

This is a bullish sign as the market is shifting from a period of decline to a period of price recovery thus lowering the gap between current rates and purchase prices.

Source: Cryptoquant

Additionally, Bitcoin’s Net Realized Profit/loss has been rising from a low of $75.5 million to $860.2 million over the past week.

When NRPL increases, it reflects positive market sentiment with a significant number of participants realizing profits. This further reinforces the confidence that prices will continue to rise thus attracting more buyers.

Source: CryptoQuant

Finally, Bitcoin’s NVM ratio has been declining over the past few days. This shows that the network is enjoying higher engagement while the market has yet to catch up. This implies that prices have the potential for future price growth.

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

Simply put, although there are 5.1 million addresses still at a loss as observed by IntoTheBlock, BTC market sentiment has shifted from bearish to positive. Therefore, the current market sentiments set Bitcoin for further gains.

As such, if the prevailing market sentiment holds, BTC will attempt  $64727 resistance level in the short term.