Selling Pressure May Hinder Bitcoin's Path to Record Prices
Quantitative analysis reveals that the high percentage of profitable bitcoin supply could lead to increased profit-taking, potentially slowing the momentum towards new historic highs.
Selling Pressure May Hinder Bitcoin's Path to Record Prices
Historical data indicates that when the supply of bitcoin held in profit exceeds 94%, market sell-offs typically occur due to profit-taking behavior. Over the past week, bitcoin has experienced a significant price increase of 12%, yet momentum towards record high prices may slow.
Currently, around 95% of bitcoin's circulating supply is in profit, which could trigger selling pressure as holders secure their gains in a rising market. The DXY index recently surpassed 103, signaling a potential correction similar to past situations when bitcoin experienced significant price drops.
Key Insights
- Bitcoin remains resilient despite fluctuations in the DXY index.
- Long-term holders are likely to be the ones capitalizing on profits while maintaining a majority of their holdings in profit.
- Over $11 billion in realized profits were recorded within just over a week, with significant profit-taking observed on specific days.
Conclusion
This profit-taking trend might lead to price corrections in the near term, creating a challenging environment for bitcoin's ascent to new all-time highs.
