Investors Selling Bitcoin as Price Correction Begins: CryptoQuant
The Bitcoin bull cycle is still ongoing, according to on-chain analytics platform CryptoQuant. While the market is currently experiencing a period of price correction, with many large Bitcoin investors selling, the overall trend remains bullish. The recent all-time high of $73,000 may have triggered some profit-taking, leading to a decline in price. However, CryptoQuant emphasizes that investment flows from new investors are still relatively low and price valuation metrics have not reached levels consistent with past market tops.
Price Correction and Overheated Metrics
Bitcoin reached an all-time high of $73,000 on March 14 but experienced a price correction afterward. Traders started selling their holdings to realize substantial profits, causing the price to drop to $61,700 on March 19. This correction was accompanied by several metrics reaching overheated levels.
- Large Bitcoin holders became more aggressive in selling as prices went above $70,000.
- During this period, these large holders transferred 567,000 Bitcoin or 35% of total transfers on the network.
Long-Term Bull Cycle Continues
CryptoQuant believes that the long-term Bitcoin bull cycle is far from over. The low level of new investment flows indicates that there is still room for growth in the market. Currently, 48% of Bitcoin investment comes from short-term holders, while the bull cycle typically ends with 84%-92% of investment from these types of holders. It’s worth noting that the market has reached levels similar to mid-2019 (52%) when Bitcoin also experienced a significant correction.
In addition to profit-taking by investors, other factors have influenced Bitcoin’s recent price movements:
- The latest Fed policy announcement, which left interest rates unchanged and forecasted three rate cuts in 2024.
- Relief in the markets due to the expectation of future interest rate cuts despite higher-than-expected US inflation figures.
Despite these factors, the Bitcoin price has bounced back from its recent lows and is currently trading around $66,200.
Hot Take: Bull Cycle Far From Over
The Bitcoin bull cycle is still far from over, despite the current price correction. While many investors are taking profits, the overall trend remains bullish. The low level of investment flows from new investors indicates that there is still potential for growth in the market. Additionally, price valuation metrics have not yet reached levels consistent with past market tops. Therefore, it is expected that the Bitcoin bull cycle will continue in the long term.
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