Bitcoin Holders Holding Out for $120,000 Amid Decreased Profit-Taking?
Despite Bitcoin’s struggle to break through higher resistance levels, long-term holders continue to remain profitable. Axel Adler noted a decrease in profit-taking by long-term holders, signaling a shift in sentiment.
Adler’s analysis revealed that long-term holders have reduced their profit realization by 60% compared to when Bitcoin was trading between $90,000 and $100,000. This reduction amounts to approximately 40,000 BTC per day at current levels.
The reluctance of long-term investors to sell their Bitcoin indicates a growing confidence in future price appreciation. This change in behavior among long-term holders is significant as it reduces the selling pressure in the market.
With decreased selling pressure in the $90,000 to $100,000 range, long-term holders are now setting their sights on the $120,000 mark before considering selling again. At $120,000, these holders would have secured a 500% profit on their initial investment, enticing them to capitalize on the gains.
If Bitcoin reaches $120,000, a surge in selling activity could be triggered as long-term holders start to take profits, potentially impacting the market significantly.
Analysis of BTC Charts
An examination of Bitcoin’s long-term holder activity indicates a reduction in selling. The Long-Term Holder Spent Output Profit Ratio (SOPR) has decreased from 5.7 to 2.7 in the last ten days.
Although long-term holders are still selling at twice their cost basis, the frequency of sales has declined. Previously, when Bitcoin was trading above $100,000, the SOPR for long-term holders remained between 2.5 and 3.
If the SOPR continues to climb and surpasses 3, it could signal a resurgence in profit-taking behavior, potentially leading to downward price movements.
Furthermore, Bitcoin’s Mayer Multiple has fallen to 1.2, indicating that Bitcoin is trading close to its 200-day moving average (DMA) and is relatively valued within its fair range.
When the Mayer Multiple is at a moderate level, long-term holders tend to scale back accumulation but maintain their holdings. This suggests that the current price level presents an opportunity for long-term holders to accumulate more assets rather than sell.
The Netflow to Exchange Netflow Ratio for Bitcoin’s Large Holders has dropped from 5.59% to 0.92% in the last two weeks. This decline suggests that major holders are transferring fewer BTC to exchanges, indicating reduced selling activity.
Given that many whales are also long-term holders who accumulate during bear markets and sell during bull markets, the decrease in profit-taking behavior from this group is noteworthy.
In conclusion, the current market conditions show a decrease in profit-taking activities, particularly among long-term holders. This reduced selling pressure from long-term holders could drive prices higher.
If this trend continues, it could bolster Bitcoin’s position to reclaim the $100,000 levels. Nonetheless, with selling activities persisting on both sides, Bitcoin may trade sideways until a new upward momentum is established.