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Bitcoin Network Sees Rising Profit-taking as BTC’s Price Shows Signs of Weakness
As the price of Bitcoin (BTC) teeters on the edge of a significant dip, profit-taking activity has been surging across the network. This development comes in tandem with growing signs of weakness in the crypto market, leading to a volatile trading environment.
The recent pullback below the $107,000 mark has sparked a wave of panic selling among short-term investors, who are looking to lock in gains and minimize potential losses. According to Glassnode, a reputable on-chain data analytics firm, the amount of BTC realized profits reached a staggering $2.4 billion on Monday.
Furthermore, the 7-day Simple Moving Average (SMA) has seen its realized profits climb to a substantial $1.52 billion, with this figure surpassing the year-to-date average by a significant margin. While this surge in profit-taking is not unprecedented, it does raise concerns about market sentiment and investor psychology.
It appears that short-term or retail holders are driving the current wave of selling, capitalizing on recent price gains rather than holding onto their coins in anticipation of higher prices. This behavior echoes previous bull cycle pauses where powerful hands accumulated in silence while others panic sell.
Glassnode’s data reveals that long-term holders have not been selling in large quantities, indicating a crucial distinction between this situation and the 2021-2022 period when both short-term and long-term investors joined forces to exit the market.
The platform highlighted that ETF inflows continue to be strong and whale wallets are still actively buying despite spiking realized profits. This suggests that the structural demand remains intact, albeit subdued.
While Bitcoin’s current performance near crucial resistance levels is cause for concern, a brief shakeout phase may not necessarily imply an impending doom or a full reversal in the cycle.
Source: bitcoinist.com
