Bitcoin Sees Early-Week Price Correction
Bitcoin is experiencing a price correction at the beginning of the week, with the digital asset falling below $42,000 on Monday. This correction is attributed to an increase in circulating bitcoin that is currently in a profitable position, according to analysis from ETC Group. The data shows that bitcoin investors are increasingly taking profits, as more coins in profit are being sent to exchanges.
The overall market is in a strong profit environment, with 88.3% of bitcoin addresses and 77.6% of ether addresses currently in profit, as stated by ETC Group. However, most of the profit-taking activity has occurred among short-term bitcoin holders, which has put selling pressure on the current rally.
Crypto Funds Experience Net Outflow
Last week marked the first week of net outflows from crypto asset exchange traded products since early October, according to ETC Group’s analysis. There were net fund outflows totaling $18.2 million for the week, with most of these outflows focused on bitcoin ETPs ($13.1 million). However, ether ETPs managed to attract net inflows of $5.8 million.
Bitcoin Price and Market Capitalization Decline
At 9:20 a.m. ET, Bitcoin saw a decline of over 4%, trading at $41,980. The global cryptocurrency market capitalization also decreased by over 4% to $1.64 trillion.
Hot Take: Bitcoin Experiences Price Correction Due to Profit-Taking
Bitcoin’s price correction can be attributed to increased profit-taking by investors who are capitalizing on the current profitable position of their holdings. This has led to a surge in coins being sent to exchanges for selling, causing selling pressure on the market. While the overall market is still in a strong profit environment, short-term bitcoin holders have been the primary contributors to this profit-taking activity. As a result, crypto funds have experienced net outflows, with more funds being withdrawn from bitcoin ETPs compared to ether ETPs. These developments have led to a decline in both the price of bitcoin and the overall cryptocurrency market capitalization.
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