Long-Term Bitcoin Holders Ease Off Profit-Taking
After Bitcoin soared to its March all-time high above $73,000, profit-taking by long-term holders has started to decrease, as per a recent report from Glassnode.
While Bitcoin’s March all-time high prompted significant profit-taking by long-term holders, this activity has begun to taper off, the Glassnode Insights report noted on Tuesday.
Typically, profit-taking, especially by long-term holders, intensifies around all-time high breaks but has been cooling down in recent weeks, according to the report.
The balance of assets between long-term Bitcoin holders and new demand indicates that the current market is entering the early stages of a euphoria or price discovery phase. However, historical analysis suggests that such phases are prone to price corrections, with drawdowns exceeding 10% being common, and many surpassing 25%.
Since Bitcoin’s all-time high in March, there have been only two significant corrections of around 10% or more, the report highlighted.
The upcoming Bitcoin halving is currently a major driver of market speculation. Sunny Lu, Founder of VeChain, emphasized how regulatory developments would impact Bitcoin’s trajectory post-halving.
Comparing the current cycle to the previous one, Lu highlighted the impact of regulation on pivotal price moments. Regulatory actions have been instrumental in driving significant price movements since the last halving in May 2020.
Lu pointed out that the approval of spot Bitcoin ETFs in March of this year triggered the latest price peak, following previous peaks after the Coinbase IPO in April 2021 and the approval of Bitcoin futures ETFs in November of the same year.
He emphasized a shift in focus from solely considering supply dynamics to broader macroeconomic factors in understanding the halving’s impact. The evolving narrative now encompasses not only the halving’s mathematical effect on supply but also macro forces influencing prices.
Featured Image: Freepik