Bitcoin Profit-Taking Has Completed, Top Analyst Reveals

An analyst has explained how profit-taking looks to have finished for Bitcoin in what has been a “very healthy reset” for the market. Bitcoin SOPR Suggests Profit-Taking From Investors Has Cooled Off In a new post on X, analyst Willy Woo has discussed about the latest trend occurring in the Bitcoin Spent Output Profit Ratio (SOPR). The SOPR is an on-chain indicator that basically tells us about whether the Bitcoin investors as a whole are selling their coins at a profit or loss right now. When the value of this metric is greater than 1, it means that the average holder in the sector could be assumed to be moving coins at some net profit currently. On the other hand, the indicator being negative implies loss realization is the dominant mode of selling in the market. Related Reading: Chainlink Becomes Crypto Winner With 21% Rally: Whats Driving This? Naturally, the SOPR being exactly equal to 1 suggests the total profits being realized are exactly equal to the losses at the moment and thus, the investors are just breaking-even on their selling. Now, here is a chart that shows the trend in the Bitcoin SOPR over the last few years: The value of the metric seems to have been neutral in recent days | Source: @woonomic on X As is visible in the above graph, the Bitcoin SOPR had spiked to highly positive levels earlier when the cryptocurrency’s price had observed its rally towards a new all-time high (ATH). This would suggest that the investors had been participating in some aggressive profit-taking during this run. From the chart, it’s visible that such a trend was also observed around the start of the 2021 bull run. With the consolidation, the asset has gone through since the ATH, the indicator’s value has also seen a cooldown. As Woo has highlighted in the chart, the metric has now approached the neutral mark. It would appear that two months after the profit-taking peaked, the appetite for harvesting gains has potentially finally disappeared among the investors. The analyst says this is a very healthy reset for the cryptocurrency, especially as the capital inflows have once again been picking up for the coin. Looks like the indicator has gone through a turnaround recently | Source: @woonomic From the chart, it’s apparent that the Bitcoin network flows had been following an overall downward trajectory earlier when the consolidation was taking place, but recently, capital injections into the coin have once again been on the rise. Related Reading: Bitcoin Still Has A Lot Of Room To Run Before Reversal, Says Top Analyst This is a similar trend to what was observed earlier in the year during the crash following the approval of the spot exchange-traded funds (ETFs). The turnabout in capital inflows back then was what led into the rally that took the cryptocurrency to the current ATH. BTC Price Bitcoin had seen a pullback under $66,000 yesterday, raising worries that the recovery surge had already fizzled out. This drop only lasted briefly, though, as the coin has returned above $67,000 today. The price of the asset appears to have been consolidating sideways over the last few days | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, woocharts.com, chart from TradingView.com

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Whats A Simple Strategy For Buying & Selling Bitcoin? This Analyst Answers

An analyst has revealed a simple strategy for buying and selling Bitcoin using the historical pattern followed by two BTC on-chain indicators. These Bitcoin On-Chain Indicators Have Followed A Specific Pattern Historically In a post on X, CryptoQuant author Axel Adler Jr. discussed a simple strategy for timing buying and selling moves for Bitcoin. The [...]

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Bitcoin Exchange Inflows Mostly Coming From Loss Holders, Weak Hands Exiting?

On-chain data suggests a majority of the Bitcoin exchange inflows are currently coming from investors holding their coins at a loss. Bitcoin Exchange Inflow Volume Is Tending Towards Losses Right Now According to data from the on-chain analytics firm Glassnode, the short-term holders are mostly contributing to these loss inflows. The “exchange inflow” is an indicator that measures the total amount of Bitcoin that’s currently flowing into the wallets of centralized exchanges. Generally, investors deposit to these platforms whenever want to sell, so a large amount of inflows can be a sign that a selloff is going on in the BTC market right now. Low values of the metric, on the other hand, imply holders may not be participating in much selling at the moment, which can be bullish for the price. In the context of the current discussion, the exchange inflow itself isn’t of relevance; a related metric called the “exchange inflow volume profit/loss bias” is. As this indicator’s name already suggests, it tells us whether the inflows going to exchanges are coming from profit or loss holders currently. When this metric has a value greater than 1, it means the majority of the inflow volume contains coins that their holders had been carrying at a profit. Similarly, values under the threshold imply a dominance of the loss volume. Related Reading: Bitcoin Hangs At $26,200: Why This Is A Crucial Support Level Now, here is a chart that shows the trend in the Bitcoin exchange inflow profit/loss bias over the last few years: The value of the metric seems to have observed some decline in recent days | Source: Glassnode on Twitter As shown in the above graph, the Bitcoin exchange inflow volume profit/loss bias has had a value above 1 for most of the ongoing rallies that started back in January of this year. This suggests that most of the exchange inflows in this period have come from the profit holders. This naturally makes sense, as any rally generally entices a large number of holders to sell and harvest their gains. Related Reading: Bitcoin Bearish Signal: NUPL Finds Rejection At Long-Term Resistance There have been a couple of exceptional instances, however. The first was back in March when the asset’s price plunged below the $20,000 level. The bias in the market shifted towards loss selling then, implying that some investors who bought around the local top had started capitulating. A similar pattern has also occurred recently, as the cryptocurrency’s price has stumbled below the $27,000 level. Following this plunge, the indicator’s value has come down to just 0.70. Further data from Glassnode reveals that the bias of the long-term holders (LTHs), the investors holding their coins since at least 155 days ago, have actually leaned towards profits recently. Looks like the indicator has a positive value right now | Source: Glassnode on Twitter From the chart, it’s visible that the indicator has a value of 1.73 for the LTHs, implying a strong bias toward profits. Naturally, if the LTHs haven’t been selling at a loss, the opposite cohort must be the short-term holders (STHs). This group seems to have a heavy loss bias currently | Source: Glassnode on Twitter Interestingly, the indicator’s value for the STHs is 0.69, which is almost exactly the same as the average for the entire market. This would mean that the LTHs have contributed relatively little to selling pressure recently. The STHs selling right now would be the ones that bought at and near the top of the rally so far and their capitulation may be a sign that these weak hands are currently being cleansed from the market. Although the indicator hasn’t dipped as low as in March yet, this capitulation could be a sign that a local bottom may be near for Bitcoin. BTC Price At the time of writing, Bitcoin is trading around $26,400, down 1% in the last week. BTC has struggled recently | Source: BTCUSD on TradingView Featured image from ???? cdd20 on Unsplash.com, charts from TradingView.com, Glassnode.com

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Bitcoin SOPR Bounces Into Profit Zone, What Does This Mean?

On-chain data shows the Bitcoin Spent Output Profit Ratio (SOPR) has bounced back into the profit zone with the latest rally above $30,000. Bitcoin SOPR Has Successfully Retested 1.0 Support Line According to data from the on-chain analytics firm Glassnode, investors are now selling their coins at a profit. The “SOPR” is an indicator that [...]

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Terawulf Launches First Ever Nuclear-Powered Bitcoin Mining Operation

Terawulf announced the launch of the world's first fully nuclear-powered Bitcoin mining operation. Called Nautilus Cryptomine, the mining facility is powered by a 2.5 gigawatt nuclear plant and is a joint venture between Terawulf and Cumulus Coin. With access to abundant low-cost nuclear energy, Nautilus Cryptomine could represent a new model for highly efficient and profitable Bitcoin mining. The facility's nuclear power source could allow it to support a huge number of mining rigs and drastically reduce energy costs compared to renewable-powered or fossil fuel-powered mining operations.

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Bitcoin Declines Slightly As Short-Term Holders Take Profits

After surging to as high as $20.9k, Bitcoin has today observed a slight decline back into the low $20k levels as a result of profit taking from short-term holders. Bitcoin Short-Term Holder SOPR Has Been Elevated Over The Past Two Days As pointed out by an analyst in a CryptoQuant post, the short-term holders seem to be using the latest price rise for profit taking. The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether the average investor is selling Bitcoin at a profit or at a loss right now. When the value of this metric is greater than 1, it means the overall market is realizing some amount of profit currently. On the other hand, values below the threshold suggest the holders as a whole are selling at a loss Naturally, values of the SOPR exactly equal to one suggest that the investors are just breaking even on their selling at the moment. Related Reading: Why Crypto Market Fear Mirrors Lull In Volatility Now, there is a cohort in the Bitcoin market called the “short-term holders” (STHs), which includes all investors who have been holding their coins since less than 155 days ago. Here is a chart that shows the trend in the BTC SOPR specifically for this holder group over the last couple of weeks: The value of the metric seems to have spiked up in recent days | Source: CryptoQuant As you can see in the above graph, the Bitcoin STH SOPR has been elevated above the 1 level during the last two days or so. This rise has coincided with the BTC price finally surging up after moving sideways around $19k for a long while. This suggests that these investors are using this opportunity to harvest some profits. Related Reading: The Inverted Bitcoin Chart Bears Don’t Wanna See | BTCUSD Analysis October 27, 2022 Such profit-taking is generally bearish for the price of the crypto, and as the chart displays, there were three instances of this kind of trend during the past two weeks. All of those profit realization sprees from the STHs resulted in the price going back down after a short-term rise. This time as well the BTC price has gone down from its high of $20.9k to as low as below $20.1k. before retracing back up some to the current level. BTC Price At the time of writing, Bitcoin’s price floats around $20.5k, up 8% in the last seven days. Over the past month, the crypto has gained 7% in value. Below is a chart that shows the trend in the price of the coin over the last five days. Looks like the value of the crypto has gone down over the last couple of days | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bullish Signal: Bitcoin Realized Profit And Loss Fall To October 2020 Levels

As the Bitcoin price continues to struggle, some metrics have begun to emerge that could mean that the current bearish trend is only temporary. The realized profit and loss levels for BTC have continued to fall over the last six months and have now hit a level that suggests the start of another upward rally. [...]

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Bitcoin Indicator Signals Short-Term Holders Have Been Taking Profits Is The Next Rally Near?

Bitcoin is trading below the $100K mark after enduring a volatile and turbulent week. The cryptocurrency faced extreme selling pressure last Sunday, dropping over 9% in less than 24 hours. Although Bitcoin managed a slight recovery on Monday, the selling pressure has persisted, leaving the market in a state of uncertainty. Related Reading: Whales Accumulate 100 Million Dogecoin In 24 Hours Demand Signals Growing Confidence Key metrics shared by Axel Adler on X shed light on the current state of Bitcoins price action. According to Adler, the Bitcoin Short-Term Holder (STH) MVRV indicator has declined from $98K and a value of 1.35 to average levels. This drop suggests that short-term holders have been actively taking profits during this period of heightened volatility. The STH MVRV is a critical indicator for assessing market sentiment among short-term participants. Historically, values above 1.301.35 signal an overheated market, often leading to sell-offs. The recent decline in the indicator indicates that some short-term holders have exited their positions, potentially marking the end of a local overheated phase. As Bitcoin consolidates below $100K, market participants are keeping a close eye on key support and resistance levels, hoping to identify the next big move in this unpredictable market environment. For now, profit-taking and volatility dominate the narrative. Bitcoin Faces Persistent Selling Pressure As Short-Term Holders Exit Positions Bitcoin has been grappling with heightened volatility and selling pressure since the start of February, a trend that has negatively impacted altcoins and meme coins, leading to bearish price action across the market. Analysts are increasingly calling for a correction as bulls show signs of fatigue and price movements suggest further declines could be on the horizon. Key insights from CryptoQuant, shared by Axel Adler on X, reveal an important shift in market dynamics. The Bitcoin Short-Term Holder (STH) MVRV indicator, a critical tool for gauging short-term holder behavior, has declined from $98K and 1.35 to average levels. This drop indicates that short-term holders have been taking profits amid the recent market volatility. Historically, an STH MVRV above 1.301.35 signals an overheated market, often preceding significant sell-offs. The current decline in the indicator suggests that a portion of short-term holders have exited their positions, relieving some pressure on the market. A return to average levels typically marks the end of a local overheated phase. Related Reading: Solana Holds Support Above Key Indicator Expert Sees Push To ATH If Momentum Returns If demand remains strong, Bitcoin is likely to enter a consolidation or sideways trading phase following this period of profit-taking. However, a drop in the STH MVRV below 1.0 would signal the formation of a local bottom, potentially setting the stage for a future rally. As the market navigates this period of uncertainty, monitoring these key metrics will be crucial in anticipating Bitcoins next move. Price Struggles to Find Direction Below $100K Bitcoin is trading at $96,700 after several days of sideways movement within a tight range between $100,000 and $95,600. The price has been unable to establish a clear direction, with bulls losing control after failing to hold the $100K mark last Tuesday. This lack of momentum has created an atmosphere of uncertainty in the market, leaving traders on edge as Bitcoin hovers near key support levels. The short-term outlook for Bitcoin remains unclear, as neither bulls nor bears have managed to take decisive control. If Bitcoin fails to hold above the critical $95K support level, a deeper decline into the $90K demand zone could follow. Such a move would signal increased selling pressure, potentially dampening sentiment further and extending the current consolidation phase. Related Reading: Ethereum Is Consolidating After The Flush Last Weekend The Calm Before A Big Move? On the other hand, reclaiming the $100K level is crucial for bulls to regain control and push the price higher. However, without a strong push above this psychological resistance, Bitcoin’s price action is likely to remain choppy and uncertain. Market participants are watching closely for any signs of a breakout or breakdown, as the next move could define Bitcoins trajectory in the coming weeks. For now, caution remains the prevailing sentiment. Featured image from Dall-E, chart from TradingView

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Microstrategy Buys More Bitcoin: Heres How Much Profit It Holds Now

Software company Microstrategy bought another $37 million worth of Bitcoin, bringing its unrealized profit to $37 million. Microstrategy Now Holds This Much In Unrealized Bitcoin Gain Michael Saylor, the founder and chairman of Microstrategy, has announced in an X post that the firm purchased an additional 850 BTC at $37.2 million in January, which was recently approved. In a post on X, CryptoQuant Netherlands community manager Maartunn explains four important facts about Microstrategy’s portfolio after this latest shopping spree. Related Reading: XRP Buy Signal Goes Off, Analyst Says This Is How Long Uptrend Will Last First, here is a chart that shows how the total supply held by Microstrategy has grown over the last few years: The trend in the total amount of the cryptocurrency held by the company | Source: @JA_Maartun on X The chart shows that the company has made several Bitcoin purchases over the past year and has substantially grown its holdings. Following the latest buying move, the firm’s wallets hold 190,000 BTC. This is a staggering amount, as the entire circulating supply of the asset is around 19.6 million BTC right now, which means Microstrategy alone holds almost 1% of the BTC supply. For perspective, all the Bitcoin spot exchange-traded funds (ETFs), including the Grayscale Bitcoin Trust (GBTC), combined, hold about 3.3% of the coins in circulation. Next, Maartunn has shared a chart displaying the cost of each purchase. The prices at which the firm made each of these buys | Source: @JA_Maartun on X Adding up all these costs, the total price of Microstrategy’s Bitcoin stack is around $5.932 billion. However, the chart below shows that the company’s actual BTC value differs from this amount. Looks like the value of the firm's holdings has significantly gone up in recent months | Source: @JA_Maartun on X As the graph shows, Microstrategy’s stack’s value at the current cryptocurrency price is notably higher than the amount it used to acquire these coins. In particular, the value of the company’s holdings is currently around $8.1 billion. Finally, the analyst shared a chart revealing the firm’s unrealized profit and loss trend over the years. The value of the indicator appears to be highly positive right now | Source: @JA_Maartun on X Microstrategy’s Bitcoin holdings had been in the red during the 2022 bear market and most of 2023, but with the start of the rally last October, the company’s fates finally changed as it returned to the green. Related Reading: XRP, SOL Among Coins With Red Sentiment, Time To Buy Against Crowd? The firm’s BTC stack holds significant unrealized gains of almost $2.2 billion. It would appear that Saylor’s strategy may have paid off, at least for now. BTC Price At the time of writing, Bitcoin is trading around the $43,000 mark, up 1% over the past week. The price of the coin seems to have been moving sideways over the last few days | Source: BTCUSD on TradingView Featured image from Shutterstock.com, charts from TradingView.com, CryptoQuant.com

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95% Of Bitcoin Now In Profit: Why This Could Be A Signal To Sell

On-chain data shows the Bitcoin supply in profit has reached levels that led to some tops in the past, like the peak of the April 2019 rally. Bitcoin Supply In Profit Has Shot Up Following BTC’s Latest Run As pointed out by an analyst in a CryptoQuant Quicktake post, Bitcoin supply in profit has hit very high levels after the asset’s latest rally. The “supply in profit” here refers to a metric that measures the percentage of the total circulating BTC supply that’s currently carrying some amount of unrealized gain. This indicator works by going through the transaction history of each coin (more precisely, each UTXO) on the blockchain to see what price it was last moved at. Assuming that the previous transfer of the coin was the last time it changed hands, the price at that instance would act as its current cost basis. Related Reading: Ethereum Leaves Bitcoin Behind, But Is This Rally Sustainable? As such, if the previous transfer price for any coin was less than the spot value of the cryptocurrency right now, then that particular coin would be holding a profit currently. The supply in profit sums up all such coins and calculates what percentage of the total supply they make up for. A counterpart indicator called the “supply in loss” does the same for coins of the opposite type (that is, those with a cost basis lower than the current price). This metric’s value can also simply be found by subtracting the supply in profit from 100 (since the total supply must add up to 100%). Now, here is a chart that shows the trend in the Bitcoin supply in profit over the past few years: The value of the metric seems to have been going up in recent days | Source: CryptoQuant As displayed in the above graph, the Bitcoin supply in profit has naturally shot up recently as the asset’s price has gone through its rally. After the latest continuation of the run towards the $57,000 level, the metric has hit the 95% mark. This means that 95% of all UTXOs in existence is carrying a profit at the moment. This may not entirely be a positive thing, however, if history is anything to go by. As the quant has highlighted in the chart, the BTC rally that started in April 2019 topped out just as the supply in profit hit the same high levels as right now. Similarly, the local top in 2020 at the beginning of the last bull market also coincided with these levels. The reason behind this pattern is likely to be the fact that investors in profit are more likely to sell their coins at any point. Thus, when a large percentage of holders are carrying gains, the probability of a mass selloff can spike up. Related Reading: XRP Forms Buy Signal, Analyst Predicts Surge To This Target That said, in the 2017 and 2021 bull runs, as well as during the November 2021 peak, the indicator did manage to surpass these levels for a while before the top was encountered. As such, it remains to be seen if the current rally is similar to the likes of the April 2019 run, in which case a top might be hit here, or if it’s a proper bull run, meaning that there might still be a while to go before the peak. BTC Price At the time of writing, Bitcoin is trading around the $56,500 level, up 8% over the past week. Looks like the price of the asset has enjoyed a sharp rally today | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, CryptoQuant.com, chart from TradingView.com

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Bitcoin Short-Term Holders Just Locked In $647 Million In Profits

On-chain data from Glassnode shows that the Bitcoin short-term holders have recently participated in a massive $647 million profit-taking event. Bitcoin Short-Term Holders Have Realized Large Net Profits Recently According to data from the on-chain analytics firm Glassnode, the short-term holders have given a strong reaction to the $52,000 break. The “short-term holders” (STHs) here refer to the Bitcoin investors who bought their coins within the past 155 days. Statistically, the longer an investor holds onto their coins, the less likely they become to sell at any point. The STHs have a relatively low holding time, so they easily sell during price rallies or crashes. Related Reading: Bitcoin Signal That Has Held Since December Says Its Time To Sell On the other hand, the “long-term holders” (LTHs), which make up the rest of the userbase (that is, those withholding time greater than 155 days), tend to carry a strong resolve. Since the STHs are fickle-minded, it’s not surprising that they have made some selling moves after the latest rally in the asset. One way to gauge the reaction of this cohort is through the “Net Realized Profit/Loss” metric. This indicator keeps track of the net profit or loss the investors realize across the network. The metric finds this value by going through the on-chain history of each coin being transferred right now to check the price it was moved at before. Assuming that a change of hands occurred in the previous transfer and that another such change is happening with the current one, then the coin’s sale would realize a profit or loss equal to the difference between the two prices. The Net Realized Profit/Loss sums up all such profits and losses and outputs the net value. Now, here is a chart that shows the trend in this indicator specifically for the Bitcoin STHs over the past few years: Looks like the value of the metric has been significantly positive in recent days | Source: Glassnode on X As displayed in the above graph, the Bitcoin STH Net Realized Profit/Loss has spiked to highly positive levels recently, implying that these investors’ profits have significantly outweighed the losses. This cohort has realized $647 million in net profits during this latest selling spree. The chart shows that the last time the indicator was at higher positive values was back around the formation of the 2021 all-time high. Related Reading: These Are The Altcoins Drawing Whale Interest, Santiment Reveals The current values aren’t off this mark, but the STH Net Realized Profit/Loss levels that hit back during the first half of the 2021 bull run are still far away. For perspective, the peak in the metric achieved back then was $2.5 billion, which remains the all-time high for the indicator. BTC Price Since the rapid surge above $52,000, Bitcoin has calmed down slightly, as it has moved sideways in the past few days. At present, BTC is trading at around $52,500. The price of the asset seems to have slowed down in the last two days or so | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com

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Bitcoin 30-Day Trader Profits Back In Healthy Range, Is BTC Ready For $100,000?

On-chain data shows the unrealized gains of the 30-day Bitcoin investors are now back inside the historical ‘healthy’ zone, a sign that could be bullish for BTC. Bitcoin MVRV Ratio For 30-Day Traders Has Declined Recently In a new post on X, the on-chain analytics firm Santiment has discussed about the trend in the Bitcoin Market Value to Realized Value (MVRV) Ratio. The MVRV Ratio here refers to an indicator that keeps track of how the value held by the BTC investors (that is, the market cap) compares against the value that they initially put in (the realized cap). Related Reading: XRP, Bitcoin See Lack Of Euphoria: Why This Is Bullish When the value of this metric is greater than 1, it means the market as a whole is in a state of net unrealized profit. On the other hand, it being under the threshold implies the dominance of loss among the investors. In the context of the current topic, the MVRV Ratio for the entire market isn’t of interest, but rather that of two specific holding ranges: 30-day and 365-day. The indicator corresponding to these ranges provides insight into the profit-loss breakdown of the monthly and yearly buyers of the asset. Now, here is the chart shared by the analytics firm that shows the trend in the Bitcoin MVRV Ratio for the 30-day and 365-day traders over the last few months: As displayed in the above graph, the Bitcoin MVRV Ratio for the 30-day investors had shot up to significant levels last month as the asset’s all-time high (ATH) exploration had taken place. Since the cryptocurrency has fallen to its consolidation phase, though, the metric has observed a cooldown. In the chart, Santiment has highlighted three zones for the indicator based on the historical trend. It would appear that the earlier increase had seen the metric surge into the ‘danger’ region, but with this decline, it’s now back inside the ‘healthy’ range. More specifically, the indicator has a value of 4.2% now, which is just inside the +5% to -5% range of the healthy zone. From the chart, it’s visible that the metric was last at this level on 26 November, just after which BTC observed a rebound. Generally, the tendency of the investors to sell goes up the higher amount of profits that they own, so high values of the MVRV Ratio can be a bad sign for the asset’s price. This is why the indicator being higher than 5% corresponds to the danger zone. Related Reading: Strong Bitcoin Rise Expected Within 1-2 Months, Quant Explains Why With the MVRV Ratio of the 30-day traders making a return into the healthy range, it’s possible that Bitcoin may be able to see a resumption of its rally or at least, avoid a further drop. The indicator for those who bought within the past year sits at more than 37%, but usually, investors who have been holding for so long don’t tend to sell easily, so these high profits may not be an immediate threat to BTC. BTC Price At the time of writing, Bitcoin is trading around $94,900, down 1% over the last week. Featured image from Dall-E, Santiment.net, chart from TradingView.com

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Bitcoin Holder Profits Now 121%: How Much Higher Can BTC Go?

On-chain data shows the Bitcoin investors are now carrying 121% profits on average. Here’s whether this has been enough for a top in the past. Bitcoin Profitability Index Is Currently Sitting Around 221% In a new post on X, CryptoQuant author Axel Adler Jr has discussed about the latest trend in the Bitcoin Average Profitability Index. The “Average Profitability Index” is an indicator for BTC that compares the asset’s spot value with its realized price. The “realized price” here refers to a measure of the cost basis or acquisition value of the average investor in the Bitcoin market. This metric’s value is determined using on-chain data, with the last price at which each coin in circulation was transacted on the blockchain being taken as its current cost basis. Related Reading: Bitcoin Sentiment Enters Danger Zone: Investors Now Extremely Greedy When the Average Profitability Index is greater than 100%, it means the spot price of the cryptocurrency is currently higher than its realized price. Such a trend suggests the average investor is holding a net amount of profit. On the other hand, the indicator being under this threshold implies the BTC market as a whole is carrying coins at a net unrealized loss. Naturally, the index being exactly equal to 100% indicates the holders as a whole are just breaking-even on their investment. Now, here is a chart that shows the trend in the Bitcoin Average Profitability Index over the past decade: As is visible in the above graph, the Bitcoin Average Profitability Index has registered a notable increase recently as the cryptocurrency’s run to the new all-time high (ATH) price has occurred. The indicator has now reached a value of around 221%, which suggests the investors are in a significant amount of gains. More particularly, the BTC addresses as a whole are in a net profit of 121%. Generally, the higher the profits of the holders get, the more likely they become to fall to the allure of profit-taking. The current Average Profitability Index level is high, but it’s uncertain if it’s high enough for a mass selloff to become a risk. Related Reading: Bitcoin Could Be Ready For Phase 2 Of This Historical Bull Pattern In the chart, the analyst has marked how high the metric went at the time of the tops of the previous bull runs. It would appear that 2017 peaked at 460%, while 2021 at 395%. So far in the current cycle, the highest that the index has gone was 272%, which happened during the top back in March of this year. Given the fact that the indicator is yet to hit this level, let alone the peaks from the last cycles, it’s possible that Bitcoin still has sufficient room to run, before a top becomes probable. BTC Price At the time of writing, Bitcoin is trading around $76,200, up more than 9% over the past week. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

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Bitcoin Bullish: Trader Profit-Taking Stays Low Despite $71,000 Break

On-chain data shows the Bitcoin short-term holders have only been taking minimal profits recently despite the asset’s latest rally. Bitcoin Short-Term Holder SOPR Is Currently At Relatively Low Levels As pointed out by an analyst in a CryptoQuant Quicktake post, the short-term holder SOPR is still under the range that has signaled overheated conditions for [...]

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Bitcoin Profitability Index Hits 202%: Is This Enough For A Top?

On-chain data shows the Bitcoin Profitability Index is at 202% right now. Here’s how this compares with past bull runs of the asset. Bitcoin Average Profitability Index Has Been Rising Recently In a new post on X, CryptoQuant author Axel Adler Jr. discussed the latest trend in the Average Profitability Index of Bitcoin. The “Average Profitability Index” is an on-chain indicator that tells us about how the spot price of the asset compares against its realized price. Related Reading: Ethereum Leverage Ratio Reaches Extreme Levels, What It Means The “realized price” here is a measure of the cost basis of the average investor or address on the Bitcoin network. The Average Profitability Index is calculated as a percentage, with the 100% mark corresponding to the spot price being equal to the realized price. When the value of this indicator is greater than 100%, it means the asset is currently trading above the cost basis of the average investor, so the overall market could be assumed to be in a state of profit. On the other hand, it being under this cutoff suggests the holders as a whole are carrying their coins at a net unrealized loss. Now, here is a chart that shows the trend in the Bitcoin Average Profitability Index over the past decade: As displayed in the above graph, the Bitcoin Average Profitability Index has been above 100% since last year, which suggests the investors as a whole have been enjoying profits. The indicator’s value had spiked to particularly high values earlier in this year when the rally towards the new all-time high (ATH) had occurred. With the latest recovery run that the coin has seen, the indicator has been picking up once again, although it’s still a notable distance away from the level seen during the ATH. At present, the BTC Average Profitability Index is floating around 202%, which implies the spot price is double that of the realized price. Historically, the indicator reaching extreme levels has generally led to tops for the asset. This is because the investors’ temptation to participate in profit-taking increases the larger their gains. “When the index rises above 300%, investors are likely to start taking profits actively,” notes the analyst. Related Reading: Bitcoin Active Addresses Finally Growing Again: Bullish Sign? The chart shows that the last two times that the Bitcoin Average Profitability Index surpassed this 300% mark was during the heights of the 2017 and 2021 bull runs. Thus, according to this historical pattern, Bitcoin’s current bullish period may not end until the indicator enters the zone above 300%. BTC Price At the time of writing, Bitcoin is trading at around $67,400, up 1% over the last seven days. Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

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Bitcoin Whale Transfers See Massive Spike: Sign Of Profit-Taking?

On-chain data shows the Bitcoin whale transactions have spiked following the latest rally, a sign that profit-taking may have begun. Bitcoin Whale Transaction Count Now Highest In Over 10 Weeks According to data from the on-chain analytics firm Santiment, the Bitcoin whales have shown an increase in activity recently. The indicator of relevance here is [...]

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Bitcoin Retraces Back From $30,000 As Profit Taking Spikes

Bitcoin had surged above $30,000 earlier during the past day but has since observed a retrace as profit-taking from traders has spiked. Bitcoin Profit-Taking Volume Is Currently More Than Twice The Loss-Taking One Bitcoin showed some promising signs of breaking away from its stagnation earlier during the past 24-hour period, as the cryptocurrency’s price managed to make a sharp recovery towards the $30,000 mark. This surge, however, couldn’t last for too long, as the cryptocurrency has already slipped to the $29,700 level. BTC has seen some rise during the past day | Source: BTCUSD on TradingView So far, Bitcoin has been able to retain a lot of the recovery despite this pullback, as the asset’s price is still significantly above the $29,000 level it had been consolidating at prior to this move. From the above chart, it’s visible that the current recovery surge looks quite similar to the one seen around the start of the month. This rally also died off at the $30,000 level and the price slid off, until it eventually ended up slumping back to sideways movement around the $29,000 mark. Related Reading: Litecoin Long-Term Holders Smartly Exited Before Halving, Data Shows It would appear that the $30,000 level was acting as a major source of resistance for the cryptocurrency back then, and it seems that its role hasn’t changed this time either. There is one thing different this time, however, and that is the level of profit-taking that the investors are displaying. According to data from the on-chain analytics firm Santiment, the profit-taking in the market has observed a sharp increase as this rally has occurred. The value of the metric seems to have been quite high recently | Source: Santiment on X In the above graph, the data for the “ratio of daily on-chain transaction volume in profit to loss” metric is shown, which keeps track of how the profit-taking volume in the Bitcoin market compares with the loss-taking volume right now. Clearly, this indicator has surged to some pretty high levels, meaning that the profit realization is far outweighing the loss realization at the moment. It’s not uncommon for this behavior to be seen during rallies, as some investors would want to quickly jump on the profitable opportunity while it’s still there. This scale of the profit-taking, however, may be worrying. At the current level of the indicator, the profit-taking volume is more than double the loss-taking volume. Related Reading: Bitcoin Miners Show Accumulation Again, Bullish Sign? As can be seen from the graph, the metric had instead remained relatively muted when the aforementioned recovery rally of a similar scale had taken place earlier in the month. This difference in behavior between the two Bitcoin price surges may be a reflection of how the investors have perceived each move. Earlier, they may have been more hopeful for further price rise, so they may not have been too keen on harvesting their profits just yet. This time, however, the holders may be thinking that this rise will die out like the previous one as well, so they are using the opportunity to quickly exit from the market. Featured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, Santiment.net

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