Bitcoin’s Price Dip Sparks Increased Profit-Taking Among Investors
In a recent development, Bitcoin has slipped below the critical $107,000 mark, descending to $105,000 as Tuesday concluded. This decline has prompted a notable rise in profit-taking activities among investors, according to a new report.
Bitcoin’s Price Decline Triggers Profit-Taking Surge
The bullish momentum that Bitcoin had been enjoying is showing signs of fatigue as market sentiment cools. Concurrently, the Bitcoin network is witnessing a marked increase in profit-taking behaviors, coinciding with BTC’s fluctuating price after a significant rally.
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Glassnode, a prominent on-chain data analytics firm, has highlighted this trend by analyzing the BTC Realized Profit metric. The uptick in profit-taking amid declining prices suggests that investors are eager to secure their gains to prevent potential losses.
Data from the platform indicates that realized Bitcoin profits surged to $2.4 billion on Monday. Furthermore, Glassnode reported that the 7-day Simple Moving Average (SMA) of realized profits has risen to $1.52 billion.
The 7-day SMA of $1.52 billion surpasses the Year-To-Date (YTD) average of approximately $1.4 billion. However, it remains significantly lower than the peaks of $4 billion to $5 billion (7D SMA) observed from November to December of the previous year.
These high realized profit figures may reflect a cautious stance among BTC investors. Many traders are choosing to sell rather than hold onto their coins due to diminishing price performance. Continued profit-taking could impede bullish efforts, potentially leading to a correction to key support levels like the $100,000 mark.
Short-Term Holders Drive BTC Profit-Taking
Alva, a market intelligence firm, has provided further insights into this concerning trend. The current wave of profit-taking within the Bitcoin network is predominantly driven by short-term or retail holders.
These investors are capitalizing on local price peaks, while selling activity from long-term holders remains at historical levels. This mirrors previous pauses in bull cycles where strong hands accumulate quietly, rather than resort to panic-induced selling.
Despite spikes in realized profits, ETF inflows remain robust, and whale wallets are contributing to price declines, indicating that the market’s foundational demand persists. As volatility lingers near resistance levels, the increased trading volume suggests a temporary shakeout phase rather than a full reversal.
If demand persists at lower price bands and ETF allocations continue, these periods might resolve with renewed upward trends, as seen historically. With Bitcoin hovering near crucial resistance levels, it’s crucial to monitor macroeconomic triggers and the actions of short-term holders. Their reaccumulation could establish the next price base.
BTC is currently trading at $107,405 on the 1D chart.
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