After testing the low $90,000 range multiple times over the past two months, Bitcoin recently experienced a significant breakout, achieving a record high of $108,786. Although this surge has drawn attention, analysts suggest that the period of consolidation witnessed in recent weeks may be coming to a close, setting the stage for Bitcoin ’s next major movement.
A recent analysis reveals a sharp decline in profit-taking among Bitcoin holders, dropping from a peak of $4.5 billion in December to around $316.7 million, a staggering 93% decrease. This reduction indicates a decreased sell-side pressure, which may pave the way for increased volatility in the market as Bitcoin remains within a narrow trading range.
The current tight price structure often precedes important market trends, signaling either the onset of a bull market or the concluding phase of a bear market. A key metric to watch is the Realized Supply Density, which reflects the concentration of Bitcoin supply within 15% of the current price. Presently, about 20% of Bitcoin ’s supply is situated within this range, suggesting that even minor price changes could significantly affect investor gains and market dynamics.
In addition to the declining profit-taking, another significant indicator is CoinDay Destruction (CDD), which tracks the economic activity of Bitcoin by analyzing how long coins remain untouched before being transacted. Recent trends indicate that many long-term holders have already realized their profits, leading the market to potentially establish a new price range to manage supply and liquidity.
Further emphasizing this trend, metrics regarding long-term holders (LTH) suggest a shift back to accumulation. The LTH Binary Spending Indicator shows a significant slowdown in the influx of Bitcoin to exchanges from long-term holders, signaling a decline in distribution pressure. Meanwhile, retail demand remains robust, with smaller investors acquiring a substantial amount of Bitcoin . Currently, Bitcoin is trading at $104,207, representing a 0.5% increase over the last 24 hours, according to CoinMarketCap data.
