Bitcoin investors are aggressively taking profits, mirroring behavior typically seen during the late stages of a bull market, according to a recent CryptoQuant Quicktake post. This trend is observed despite Bitcoin trading in the mid-$90,000 range. The uptick in profit-taking mirrors investor behavior typically seen during the late stages of a bull market.
Bitcoin's 7-day moving average net realized profit/loss has mostly remained positive since early 2024, surging as high as $1 billion a day as Bitcoin pushed towards new all-time highs last year. CryptoQuant contributor Kripto Mevsimi noted that such strong realized profits, even as prices rise, typically signal a late-stage bull market. Comparisons were drawn to the 2021 market cycle, where similar patterns preceded a local top.
Seasoned crypto analyst Ali Martinez warned that BTC may retest the $97,700 resistance ahead of today's Federal Open Market Committee (FOMC) meeting, potentially triggering another short-term pullback. At press time, BTC trades at $97,248, up 3.4% in the past 24 hours. While exchange reserves continue to dwindle, recent on-chain data suggests a supply squeeze is unlikely in the near term.
Momentum indicators like the Bitcoin Stochastic RSI are showing renewed strength, bolstering the case for BTC to reach a new ATH. If realized profits remain high, the likelihood of a sharp correction increases, potentially pushing BTC back toward $90,000. Conversely, if profit-taking declines, it could indicate the start of a market cycle transition.
The launch of spot Bitcoin exchange-traded funds (ETFs) in January 2024 has altered the market structure to a great extent. Investor psychology has remained the same in that profit-taking patterns still align with historical patterns, though now with greater speed and volume. Short-term volatility is expected to rise.
Recent data shows that market participants are still favoring short-term speculation over holding BTC for the long-term. Bitcoin's demand momentum is yet to recover from negative territory. The signal is not calling a full macro top, but it's flashing a local caution zone.
This article is based on our author's analysis of materials taken from the CryptoQuant Quicktake post and other sources.