- Bitcoin’s recent rally above US$69,000 has placed over 94% of holders in profit, raising concerns about potential short-term profit-taking.
- Most Bitcoin was purchased around the US$55,000 level, according to data from CryptoQuant, encouraging a “Buy-the-Dip” mentality among traders.
- Historically, when a large percentage of Bitcoin holders are in profit, a price drop tends to follow, as seen in previous corrections in September 2023 and March 2024.
Bitcoin’s (BTC ($111,681.00)) recent rally above its previous high of US$69,000 (AU$103,810) has resulted in over 94% of holders now being in profit. But this surge is causing anxiety—raising the question of whether it will trigger profit-taking in the short term, as Bitcoin faces resistance at a key price level.
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94% of Bitcoin Supply in Profit
According to data from CryptoQuant, analysed by independent analyst Axel Adler Jr, 94% of Bitcoin’s total supply is currently in profit, with most coins purchased around the US$55,000 (AU$82,738) level.
94% of the Bitcoin supply is in profit, with the majority of coins having been purchased at the $55K level. pic.twitter.com/ccHeFIJJa3
— Axel
Adler Jr (@AxelAdlerJr) October 22, 2024
Short-term holders who bought during recent dips are now seeing their holdings back “in the money”, according to analyst Checkmate. This trend encourages a “Buy-the-Dip” mentality among traders, which could serve as a tailwind for bullish sentiment.
Over 94% of the #Bitcoin supply is now back in profit.
In particular, Short Term Holders have been rewarded for buying the chopsolidation dip in recent months, with almost all of their holding back in the money.
This reinforces Buy-the-Dip behaviour, and is a sentiment tailwind pic.twitter.com/97yw1Dqp9I
(@_Checkmatey_) October 21, 2024
Dip Incoming?
History suggests that when a significant percentage of the Bitcoin supply is in profit, a significant price drop may follow.
Similar conditions were seen in September and March of recent years, leading to sharp declines in Bitcoin’s price as investors and traders took profits. For example, when Bitcoin hit US$73,835 (AU$111,170) in March 2024, it subsequently dropped by 23% to US$56,500 (AU$85,069) in May.
Popular trader Michaël van de Poppe believes this is just a small correction that will be over soon.
Indeed, BItcocin dropped to the $65K area and quickly reversed upwards. I think that this small correction is close to over. Macroeconomic period starts, including the Elections. Time to see those Yields drop & Crypto flourish.
Michaël van de Poppe Moreover, he also thinks the altcoin market is about to take off, it’s just a matter of “one final breakout and the all-time high is next”.
Crypto Total Market Cap Excluding BTC and ETH ($4,041.76). Source: Michaël van de PoppeRelated: Paul Tudor Jones Long on Bitcoin and Gold, Says ‘All Roads Lead to Inflation’
Bitcoin’s price is currently trading at US$67.2K (AU$101.8K), a 0.16% change from yesterday. In the last seven days, the coin has experienced a tremendous amount of volatility, as highlighted in the chart below.
Bitcoin (BTC), weekly chart, source: CoinMarketCapThe post Bitcoin Price Falls as Most Holders Profit, Indicating Potential Market Peak appeared first on Crypto News Australia.
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