Last week, Bitcoin (BTC) rose above $ 44,00 and then reached a crucial resistance at the psychological level of US$ 45k before falling back. What expected trends in BTC? Taking recent analytical reports and views of a CryptoQuant analyst into consideration.
Bitcoin’s Price Dynamics, According to CryptoQuant
According to a CryptoQuant analyst, the recent fall in Bitcoin prices may be due to selling by particular groups of investors. Yonsei, the analyst says that once bitcoin breached $40K barier on-chain data showed short term holders and investors with a holding period of 6 to18 months began slowly selling off.
We could see this profit-taking trend in the Coin Days Destroyed (CDD) measure, which tallies up how much older BTC was destroyed. Increasing binary CDD means huge BTC is getting spent or that long-held tokens are finding their way out. Yonsei pointed out that this same pattern was during Bitcoin’s run-up in early December, showing clearly the role played by short-term investors. This trend is further evidenced by the fact that on average most holders of Bitcoin have been in profit. The spent output profit ratio has always stayed above 1, meaning around nine tenths are currently making a gain.
Behavior of Bitcoin Investors: Short-Term vs. Long-Term
At the same time as short-term holders are enjoying high profits, some long-term holders with ageing Bitcoins older than six months shed their positions preemptively at a price of $ 4400 just before it plummeted. Meanwhile, long-term investors aren’t selling their tokens but are waiting for the next surge in prices.
CryptoQuant’s latest weekly report points out that the crypto market suffered selling pressure from Bitcoin miners and whales.
Disclaimer: This article is for informational purposes only and does not offer investment advice. Given the high volatility and risks in the cryptocurrency market, investors are encouraged to perform their own research.