Bitcoin's surge to $94,000 shows a mix of macro optimism and shifting investor sentiment: Glassnode

• Bitcoin rallied above $94,000 due to positive developments surrounding the US-China trade war.

• BTC's surge caused the percentage of its supply in profit at current price levels to rise to 87.3% from 82.7% in March.

• Bitcoin ETFs recorded $1.83 billion in net inflows between Tuesday and Wednesday, signaling an increase in institutional demand for Bitcoin exposure.

Bitcoin (BTC) traded above $93,000 on Thursday as rumors of US-China tariff easing stirred a rebound in price, sending the percentage of supply in profit at current price levels to 87.3%, 5% above 82.7% recorded in March, according to Glassnode data. The Short-term Holders (STH) Profit/Loss Ratio also rose to neutral levels at 1.0, indicating that the market has slightly moved from bearish territory to safer grounds.

Bitcoin’s cross above $90K sees short-term holders demonstrating high profit-taking behavior

This week, the crypto market rebounded from recent downturns, with Bitcoin climbing as high as $94,000 on Tuesday. Bitcoin's rally stemmed from speculations of a calm in the US-China tariff war, which quickly sparked optimism among investors.

The rally caused Bitcoin to break above the Short-term Holder (STH) Cost Basis — a metric measuring the average purchase price of short-term holders — currently at $92,900, according to Glassnode's weekly on-chain report. The report stated that a move above the STH Cost Basis historically signals the end of a bearish phase and the start of a new bullish trend.

BTC STH Cost Basis. Source: Glassnode

The rise was also accompanied by a recovery in unrealized profit held by investors. Bitcoin's percentage supply in profit metric rose to 87.3%, 5% more than the previous range of 82.7% — when Bitcoin last traded around $94,000 in early March. This indicates that 5% of Bitcoin's circulating supply has changed hands at lower price levels since early March. 

Alongside the unrealized profit metric, Glassnode's analysts revealed a rise in the STH Supply Profit/Loss Ratio to a neutral level of 1.0.

"This suggests that short-term supply is more evenly split between coins in profit and loss, making this a point of balanced sentiment for this cohort," Glassnode stated in the report.

A movement to neutral levels is significant, as it signals that Bitcoin has risen out of a bearish phase to more stable ground. A push or pullback from here will either lead to a local top for BTC or a more robust recovery.

Bitcoin STH Supply Profit/Loss Ratio. Source: Glassnode

However, the recent surge in prices has been accompanied by high profit-taking behavior among short-term investors, showing that many are taking advantage of the rally to realize profits. 

Glassnode stated that if the market can withstand this wave of selling without a major pullback, it would signal a healthier and more resilient outlook for BTC.

On the other hand, if current levels fail to hold under the weight of this profit-taking, the recent price rise could prove to be yet another "dead cat bounce." This indicates that the recovery could be short-lived, mirroring previous relief rallies, which ultimately lost momentum under similar conditions.

Additionally, Bitcoin has received strong support among institutional investors during this period, with ETFs netting inflows of $1.83 billion between Tuesday and Wednesday, according to Farside Investors data. This implies that bullish sentiment is gradually rising among traditional investors.