Several optimistic projections have been put forth regarding Bitcoin [BTC] throughout this year, with numerous experts displaying confidence in BTC’s potential to surge well beyond $100,000.
The recent uptrend seems to have sparked a wave of Fear of Missing Out (FOMO), as evident from the spike in the number of addresses holding BTC.
According to data from CryptoQuant, the recent Bitcoin rally was characterized by a notable increase in active addresses.
This surge not only reflects the market’s positive sentiment but also indicates a strong desire among investors not to miss out on the rally.
The number of active addresses was as low as 766,947 on November 3, but has now surged to over 1.18 million addresses by November 12.
This trend clearly correlates with the rising prices of Bitcoin.
The increase in active BTC-holding addresses also mirrors the significant inflow of funds into ETFs observed during the same period.
Is the Buying Pressure on Bitcoin Decreasing?
While the rise in active addresses has been fueling bullish momentum, recent data indicates a growing trend of profit-taking among investors.
This is particularly noticeable among a specific group of long-term holders (HODLers) who have possessed BTC for 6 to 18 months, primarily in the spot market.
The data reveals that those who recently sold had begun accumulating as early as May 2023, enjoying over 200% profits over the 18-month period.
As per CryptoQuant, these are mid-term holders who entered the market when prices were around $28,000.
Approximately 230,000 BTC were transferred from addresses holding for 6 to 12 months between November 3 and November 12. Additionally, around 41,500 BTC moved from addresses holding for 12 to 18 months.
Could This Signal the End of the Current Bullish Trend?
The increase in selling pressure from mid-term hodlers may suggest that Bitcoin is poised for a substantial correction.
Bitcoin recently reached a peak of $89,940 on November 12, after which signs of bullish exhaustion and sell pressure have become apparent.
Bearish sentiments are on the rise due to Bitcoin being significantly overbought in recent trading sessions.
The profit-taking by mid-term holders not only signifies a surge in selling activity but also hints at the possibility that long-term holders are bracing for a market correction following the recent rally.
While a pullback at current levels seems likely, optimism remains high, especially as we approach 2025.
The increase in active addresses suggests that FOMO could help maintain a higher price floor and drive further investments, with Bitcoin continuing to attract interest as an appealing option below the $100,000 mark.