Cryptocurrency Investors Realize Gains as Bitcoin Rate Spikes, Yet Apex May Still Be Unreached
Hey there! Long-term Bitcoin (BTC) holders have been getting active recently following the digital currency's brief rally above the psychological $105,000 mark, reports CryptoQuant analyst Carmelo Alemán.
It appears that these investors are starting to cash in on their profits, as on-chain data shows a spike in realized profits in this group over the past few days. This trend suggests that many long-term Bitcoin investors are selling their coins, profiting from the sharp price surge.
CryptoQuant's analysis reveals that BTC's Long-Term Holder Spent Output Profit Ratio (LTH-SOPR), which measures whether investors who have held a particular asset for over one year are in profit or not, reached a yearly low of 1.32 on March 12. However, it steadily climbed to reach 2.274 by May 13, indicating a 71.33% increase in realized profits over two months.
This surge in profit-taking might signal that long-term Bitcoin holders are beginning to capitalize on their gains, possibly in anticipation of future corrections or in response to an overall improvement in market sentiment. These profit-taking activities can be crucial in understanding future price movements, as historically, they have preceded significant fluctuations in Bitcoin's price.
While spikes in BTC's LTH-SOPR have often coincided with distribution phases, where seasoned investors begin selling their holdings before potential downturns, the market is currently far from its cycle peak. One factor that may be contributing to this is the persistent positive funding rate. This stands at 0.0025% at press time, indicating a high demand for long positions among futures market participants, suggesting a bullish sentiment in the BTC market.
At the time of writing, BTC trades at $101,726, down 2% over the past day due to the broader market pullback. Significant selloffs could pressure the coin's price down to around $98,044, but if accumulation resumes, BTC could break resistance at $102,080 and rally up to $104,971.
Keep in mind that this analysis is for informational purposes only and should not be considered financial or investment advice. Always conduct your own research and consult with a professional before making any financial decisions. If you're interested in trading, consider Uphold, a platform that offers early access to new tokens, one-step trading, and multi-asset support.
Sources:1. Bitcoin's Long-Term Holders significantly increased their profit-taking in recent weeks, according to on-chain data.2. Historically, spikes in BTC's LTH-SOPR have been associated with significant price movements.3. Despite profit-taking actions, long-term holders have continued to accumulate more BTC, indicating their commitment to holding the cryptocurrency for the long term.4. The average long-term holder is expected to reach a 350% profit margin at around $99,900, which could increase sell-side pressure if prices approach this level.5. The maturation of new investors into long-term holders reduces selling pressure, which can help stabilize the price and potentially drive it higher as the market becomes more resilient to short-term volatility.
- Long-term Bitcoin holders have been cashing in on their profits following the digital currency's brief rally, with on-chain data showing a spike in realized profits.
- The surge in profit-taking by long-term Bitcoin holders might signal a capitalization on gains, potentially in anticipation of future corrections or an improvement in market sentiment.
- While profit-taking spikes have often preceded significant fluctuations in Bitcoin's price, the market is currently far from its cycle peak, with a persistent positive funding rate indicating a high demand for long positions.
- Keeping in mind this analysis for informational purposes only, it's essential to conduct your own research before making any financial decisions, as platforms like Uphold could offer opportunities for early access to new tokens and one-step trading.
- The maturation of new investors into long-term holders can help stabilize the price and potentially drive it higher, as this trend reduces selling pressure, making the market more resilient to short-term volatility.
