Double-digit drop in Bitcoin profit-taking metric hints that BTC is ‘ready’ to rally — Analyst

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As an analyst with over two decades of experience in both traditional finance and cryptocurrencies, I have witnessed numerous market cycles and learned to read between the lines of price movements and indicators. In the case of Bitcoin, the recent drop below $105,000 might seem like a cause for concern, but I believe it presents an opportunity for those with a long-term outlook.

On December 17, Bitcoin’s (BTC) price soared to an unprecedented peak of $108,365, but subsequently dipped below $105,000 in the days that followed. This minor downturn occurred before the anticipated announcement by the U.S. Federal Reserve about interest rates on December 18. At present, the financial market is speculating a reduction of 25 basis points.

Despite the temporary market fluctuations, one cryptocurrency expert has pointed out a potentially optimistic situation unfolding, as long-term Bitcoin investors are strategically preparing themselves to reap future profits.

Bitcoin LTH profit-taking drops from $10 billion to $3 billion

In November 2024, Bitcoin experienced an unexpected 37% increase and hit a record high. This remarkable achievement was followed by a flurry of investors cashing out, with reports suggesting that approximately 366,000 Bitcoins were sold each month, equating to around $10 billion in total. (CryptoMoon reported this figure.)

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Based on recent developments, Percival – a trusted Bitcoin analyst at CryptoQuant – pointed out that the intensity of profit-making activities has noticeably decreased over the last twenty-one days.

According to the graph, the profit accumulated by long-term Bitcoin holders decreased from a staggering $10 billion on November 25 to a more modest $3 billion on December 14. This decrease occurred despite Bitcoin prices experiencing a 12% increase during that time frame. The analyst further noted…

“This means that LTH has realized most of its profits at this stage and is ready to see further increases.”

Furthermore, using a 90-day market versus real price gradient oscillator graph, Percival demonstrated that the index currently resides within a balance area at 0.5, suggesting a neutral stance between purchasers and vendors.

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Showing a robust equilibrium, the interplay between both aspects hints at a possible “rising trend” as the crypto asset neither exhibits signs of being excessively bought (overbought) nor sold (oversold).

Bitcoin funding rate signals no signs of ‘late-cycle overheating’ — Analyst

Bitcoin price diverges with Coinbase premium

Although there’s been a reduction in profit-making and a leveling off, it’s worth mentioning that the Coinbase price difference, or premium, has been decreasing since early December. This observation was made by an unidentified cryptocurrency trader known as Yonsei Dent, who noted over the past fortnight, the premium has experienced a significant drop compared to Bitcoin prices.

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The inverse correlation suggested that BTC’s rally was not supported by demand from US investors. The analyst added,

“It could indicate underlying weakness in medium-term upward momentum. Investors should remain cautious and monitor this development closely.”

Despite Bitcoin‘s volatile market trends this year, Daan Crypto, a freelance cryptocurrency trader, stated that the price movement resembles that of last year. The trader predicts more volatility until the final two weeks of 2024, after which they anticipate a significant “price breakout” in Q1 2025.

This piece serves as a source of general knowledge rather than offering any specific legal or financial guidance. The perspectives, ideas, and conclusions presented are those of the author and may not align with the views of CryptoMoon.

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2024-12-18 22:58