Following a period of steady growth, Bitcoin’s [BTC] price experienced a decline recently and began consolidating below the $70,000 mark. Interestingly, it appears that prominent investors have also been decreasing their cryptocurrency holdings in 2024.
Could this decrease indicate a lack of faith in BTC, or are these investors simply aiming to maximize their profits?
Is the Sale of Bitcoin by Large Holders in Progress?
It is important to recognize that despite the drop in BTC’s value, its price remained near its peak as of the latest update. Revealing an intriguing development, IntoTheBlock posted a tweet highlighting that the number of addresses holding over 1 BTC decreased from 1,024,437 to 1,013,120 since the beginning of the year.
At first glance, this reduction may suggest a loss of confidence among whales regarding the leading cryptocurrency. Nevertheless, the rationale behind this shift might be profit-driven, with whales opting to divest their assets while BTC’s price was notably high.
Examining the on-chain data of Bitcoin, CryptoCrypto noted that the net position change for BTC has been consistently negative over recent months. This trend could largely be attributed to the price surge witnessed by BTC during the same duration. Investors often tend to sell their holdings as prices approach all-time highs to secure profits.
In addition, CryptoCrypto’s evaluation of Bitcoin’s social metrics aimed to determine whether there has been a decline in market confidence. According to the analysis, BTC’s weighted sentiment oscillated between positive and negative territories frequently in the past week.
These fluctuations indicated a lack of predominant sentiment in the market, thus increasing the likelihood of whales selling off their holdings to capitalize on profits.
Forecasting Bitcoin’s Trajectory
In light of prominent investors taking profits and reducing their crypto positions, CryptoCrypto proceeded to assess the potential impact on Bitcoin’s price.
Based on an analysis of CryptoQuant’s data, it was observed that Bitcoin’s aSORP indicator was in the red zone, signaling an increase in profit-taking activities. Such behavior amidst a bullish market could signify a possible market peak.
Furthermore, insights derived from Coinglass’s liquidation heatmap suggested that in the event of a price downturn, Bitcoin’s value could dip to $68.6k. This scenario would likely prompt a surge in liquidations, potentially establishing a support level from which bullish momentum could emerge.
Despite these projections, CryptoCrypto’s analysis indicated a recent drop in Bitcoin’s NVT ratio, hinting at a potential price upswing in the near future.