Is Bitcoin Profit-Taking Surging to a 2-Month High, Indicating an Upcoming Pullback?

Is Bitcoin Profit-Taking Surging to a 2-Month High, Indicating an Upcoming Pullback?

Bitcoin (BTC) Profit-Taking Volume Surges as Price Rises

Recent on-chain data from Santiment outlines that investors are capitalizing on the latest surge in digital currency prices by taking profits. This is evident from the ratio of daily on-chain transaction volume in profit to loss, which measures the volume of profit-taking compared to loss-taking in the market. And once this indicator is over zero, it implies that profit-taking is dominant between investors.

To determine profit-taking and loss-taking volumes, the indicator analyzes the historical on-chain data of each coin sold or transferred on the network. If the selling price of a coin was lower than its current spot price, it contributes to the profit-taking volume.

Chart Shows Bitcoin (BTC) Profit-Taking Indicator Over Past Month

The chart provided by Santiment displays the changes in the Bitcoin (BTC) profit-taking indicator in the previous 30 days. It indicates that profit-taking has been gaining steadily, surpassing loss-taking volumes. This implies that investors are cashing out on their gains during this period of consolidation.

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Along with the profit-taking indicator, Santiment likewise includes data for active addresses. This metric tracks the total number of addresses involved in transfer activity on the blockchain daily. The high values observed recently indicate whole lot of trader attention towards Bitcoin.

Impact on Bitcoin Price

Regardless of the presence of sellers in the market, the high degree of activity could likewise indicate strong buyer interest. It remains to be seen whether profit-takers will push the price down or if buyers will counter their actions and maintain upward momentum.

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As of now, Bitcoin (BTC) reached a peak of $26,700 before retracing below $26,500 today.

Bitcoin Price Chart

Hot Take: Bitcoin (BTC) Profit-Taking on the Rise

The surge in Bitcoin (BTC) prices has led to an increase in profit-taking volumes between investors. As the profit-taking indicator surpasses loss-taking volumes, it indicates a growing trend of investors cashing out on their gains. This behavior could potentially create resistance to further price surges. Nonetheless, the high degree of activity and attention from traders suggest that there is likewise strong buyer interest in Bitcoin. The battle between profit-takers and buyers will in the end determine the direction of BTC’s price movement in the near future.

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