Majority of Bitcoin owners are currently in a profitable position, leading to speculation about a potential Bitcoin peak.
Revamped Version
Bitcoin's Profit Sweep Fuels Profit-Taking Speculations
Here's the lowdown on crypto: Over 85% of Bitcoin holders are now raking in profits, setting off talks regarding short-term profit-taking. That's according to an analysis penned by CryptoQuant contributor Darkfost on Apr. 29, who cracked open the lid on the "supply in profit" metric, which tracks the percentage of Bitcoin owners currently in the green. This rebound from a recent 75% dip is a familiar sight, with this support zone often ringing true during past market cycles.
Darkfost reminded us, "A whopping chunk of supply in profit ain't always a bad thing. It tends to back up bullish trends – until it hits beyond its midpoint." The historically studied parameter tends to triggers market euphoria, often culminating in corrective phases once it creeps up to the 90% mark.
Bitcoin's currently cruising between $94K and $95K. Technical nitty-gritty show mixed signals. The relative strength index is hovering at 66, edging towards the oversold zone. Though technical indicators like the Stochastic RSI are hinting at weariness in momentum, the moving average convergence/divergence is still heading north. If the buying force rekindles, Bitcoin may blast through $98K and retest the $100K mark. On the flip side, a downturn could be triggered if Bitcoin breaks below $89K, swinging the pendulum toward the $85K-$87K zone.
Institutional interest seems to be the prime mover behind the recent surge. As per data from SoSoValue, U.S. spot Bitcoin exchange-traded funds pocketed $764 million in net inflows over the last week. Corporate buyers are joining the bandwagon too. MicroStrategy recently picked up 15,355 BTC worth $1.4 billion, amplifying its total loot to a mighty 553,000 BTC.
Institutional demand is expected to escalate in the near future. Cantor Fitzgerald, SoftBank, Bitfinex, and Tether plan to launch 21 Capital, a $3.6 billion Bitcoin venture. The next move for Bitcoin hinges on whether this institutional upswell can power it through resistance despite the profit-taking whispers among retail traders.
Good news for Hodlers! South Korea has green-lit spot Bitcoin ETF trading this year.
Want more insight? When the 'supply in profit' metric hits the 90% mark, it usually triggers a market frenzy. Here's what goes down:
Market Frenzy Factors
- Euphoric Phases: Once the 90% threshold is crossed, markets can sail into euphoric territory, underscored by intense bullish sentiment and possible price surges. However, these periods can be short-lived, often followed by corrections.
- Ramped-up Volatility: With investors catching the optimism wave, market volatility may skyrocket, courtesy of profit-seeking traders and newcomers joining the game, causing sudden price fluctuations.
Market Dynamics
- Bullish Momentum: A heightened sense of profitability among investors can keep the buying pressure going and drive prices higher. Predictions suggest that Bitcoin could sail towards $115K if euphoria maintains its momentum.
- Potential for Corrections: Despite the bullish momentum, experts caution that these euphoric phases could come to an abrupt end, resulting in panic-selling and potentially triggering a corrective phase if investors start shedding their Bitcoin holdings.
- The profit-taking speculations surrounding Bitcoin are escalating, as over 85% of Bitcoin holders are currently profiting, according to an analysis by CryptoQuant contributor Darkfost.
- As the 'supply in profit' metric approaches the 90% mark, markets tend to enter euphoric phases, characterized by intense bullish sentiment and possible price surges.
- Institutional interest has been playing a significant role in the recent Bitcoin surge, with large-scale investments being made by companies like MicroStrategy and ventures like 21 Capital.
- South Korea has approved spot Bitcoin ETF trading this year, good news for Hodlers.
- Tron, XRP, and other crypto tokens may also experience increased volatility due to the convergence of profit-seeking traders and newcomers in the markets.
- DeFi (Decentralized Finance) platforms could benefit from this market frenzy, providing alternative investment opportunities to those looking to diversify their crypto portfolios.
- The finance industry is continually evolving with technology, and investing in cryptocurrencies like Bitcoin and innovative projects such as Initial Coin Offerings (ICO) and Tron can offer potential lucrative opportunities for investors, but caution is needed amid the market's volatility and euphoria.
