Bitcoin Short-Term Holders Sell $4.5 Billion Worth of BTC in Four Days
According to on-chain data, Bitcoin short-term holders have recently participated in a significant profit-taking event, selling BTC worth almost $4.5 billion over the past four days. Short-term holders refer to investors who acquired their Bitcoin within the last 155 days, and they tend to react more to market FUD or FOMO compared to long-term holders.
Tracking Investor Selling through Exchange Transfers
To determine whether these short-term holders are selling their Bitcoin, one way is to monitor the total transfer volume they send to centralized exchanges. This is because exchanges are where investors deposit their holdings when they want to exit the market. Data shows that the transfer volume from short-term holders to exchanges has increased during the recent rally, indicating a rush of profit-taking.
Largest Profit-Taking Event Since November 2021
Analyst James V. Straten reveals that short-term holders have deposited around $4.5 billion in the last four days, with $1.5 billion coming in just yesterday. This profit-taking event is the largest since November 2021 when Bitcoin reached its all-time high price.
Rally Sustainability and BTC Price
Despite the large selloff by short-term holders, Bitcoin has managed to maintain its upward momentum and currently hovers around $41,900. This suggests that there is sufficient demand in the market to absorb the selling pressure and indicates a positive sign for the sustainability of the rally.
BTC Price Retesting $42,000 Level
Bitcoin is on the verge of retesting the $42,000 level as it currently trades around $41,900.
Hot Take: Bitcoin Short-Term Holders Cash Out, But Rally Remains Strong
Bitcoin short-term holders have taken advantage of the recent rally to cash out their profits, resulting in a massive profit-taking event. However, despite this selloff, Bitcoin has shown resilience and continues to push towards higher levels. The fact that there is sufficient demand to absorb the selling pressure indicates the sustainability of the rally. As Bitcoin retests the $42,000 level, it remains to be seen whether it can break through and continue its upward trajectory.
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