As a seasoned crypto investor with a decade of market experience under my belt, I find myself intrigued by the advice from CryptoQuant to sell Bitcoin aggressively once realized profits reach 4%. Having witnessed the wild volatility and subsequent bear markets of the past, I can’t help but feel a mix of excitement and trepidation.
According to an analysis, Bitcoin (BTC) investors might want to consider selling their BTC more actively when they hit a significant point of profit realization.
On December 13th, in a post for its Quicktake blog, the on-chain analytics platform CryptoQuant advised its readers to keep an eye on the percentage of Bitcoin’s total supply that is currently showing a loss.
BTC supply in loss can drop 50% before sell signal
As an analyst, I’ve observed that Bitcoin bull markets often reach their peak when the profitability of supplying Bitcoin surpasses a specific level. According to my analysis based on data from CryptoQuant, this seems to be a recurring trend.
Examining the previous bull market, which took a turnaround towards the end of 2021, Onchain Edge’s analysis showed that profitable supply conditions had been signaled for quite some time.
If the percentage of lost Bitcoin supply drops below 4%, it’s a signal to begin aggressive DCA (Dollar Cost Averaging) investments in Bitcoin, and then patiently wait for the lowest points during the next market downturn.
In simpler terms, Onchain Edge discussed a method for investing known as Dollar-Cost Averaging (DCA), which involves consistently purchasing Bitcoin using a fixed amount of a different asset, such as traditional money, on a recurring basis.
It might have been wise to start selling Bitcoin through Dollar-Cost Averaging (DCA) in February to lessen the impact of Bitcoin’s volatility that was prevalent throughout 2021 and secure profits by minimizing exposure.
The post stated, ‘What’s causing this? When the rate falls below 4%, it suggests that many individuals are experiencing profits, marking the high point of a bull market.’
A graph provided an example of the ongoing daily average of goods currently being sold below cost, with the figure on December 12 hovering around 8%.
Bitcoin whale profits still modest
According to CryptoMoon’s report, other market players are keeping an eye on the profitability of specific Bitcoin (BTC) holders as potential indicators for the price movement.
Specifically, the figures $110,000 and $120,000 serve as potential peaks for prices, largely due to their impact on short-term investors.
These speculative investors tend to react more suddenly to BTC price moves.
As a researcher delving into unexplored territories of Bitcoin’s profit distribution, I found minimal reasons to worry, much like my esteemed colleague Darkfost at CryptoQuant who also noticed this pattern.
In comparison to events in March, the ratio of unrealized profits nearly hit 2, but then dropped as whales cashed out their profits and Bitcoin’s value began to decrease,” is a simpler way to convey the same information.
“With the unrealized profit ratio currently around 1.2 and Bitcoin priced near 100k, this indicates that there may still be room for the bullish trend to continue in the mid-term.”
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2024-12-13 13:12