Bitcoin (BTC) Latest Price Rally Has Triggered Profit Taking, Their Daily Realized Gains Stands at Around $2 Billion

Increased profit taking has increased with Bitcoin's price rise to almost its record high price of $100,000

Bitcoin (BTC) price enjoyed a recent rally that saw almost $2 billion in daily realized gains, indicating a large number of investors quickly profited from the price increase. However, a deeper analysis of the data reveals a clear separation between the long-term and short-term holders of Bitcoin.

As Bitcoin’s price surged to within reach of its record high of $100,000, increased profit-taking was observed among shorter-term investors, particularly those who acquired coins within the past year.

According to data from blockchain analytics firm Glassnode in “The Week Onchain,” $443 million in profits were realized across the Bitcoin holder spectrum on Nov. 22. However, these figures suggest a clear presence of selling pressure, and the realized profits paint a clearer picture of the market situation.

Among realized profits, coins with a holding period of 6-12 months contributed to 35.3% of the total sell activity, highlighting that newer market participants were dominant in selling.

‘Diamond Hands’ Display Fortitude

In contrast to the shorter-term investors, the ‘long term holders,’ more popularly termed the ‘diamond hands,’ displayed a measured approach during this particular run-up.

In its latest report, Glassnode highlighted that these former holders remained largely patient with their coins, implying an anticipation of even higher Bitcoin price.

“More seasoned investors remain steadfast, refraining from selling en masse,” the report noted. This sentiment was evident in a sharp divergence between short-term and long-term holder activity.

Coins held for over a year saw relatively minimal profit-taking compared to those acquired more recently, particularly in the wake of the U.S. spot Bitcoin ETF approvals.

The introduction of U.S. spot Bitcoin ETFs played a pivotal role in attracting new market participants. However, these funds also showed significant sensitivity to Bitcoin price fluctuations.

Over just two trading days, ETFs recorded net outflows exceeding $550 million, according to Farside Investors, coinciding with BTC/USD falling from $99,000 to $90,800.

Institutional investors, including those behind ETFs, appeared to be more reactive to short-term price movements than traditional long-term Bitcoin proponents.

This volatility was reflected in the performance of MicroStrategy, the company with the largest corporate Bitcoin holdings. After peaking on Nov. 21, its stock dropped 35% in a record four-day losing streak, even as it continued to expand its Bitcoin reserves.

A Split Market Narrative for Bitcoin Price

The current market scenario seemed to weave a tale of two Bitcoin cohorts: one swiftly realizing profits and the other biding their time for potentially higher prices.

While newer market participants seized the opportunity to lock in gains, the restraint displayed by long-term holders underscored their confidence in Bitcoin’s long-term value.

As Glassnode observed,

“The dominance of coins aged 6 months to 1 year highlights that the majority of spending originates from newer entrants to the market.”

Meanwhile, seasoned Bitcoin veterans continued to play the long game, solidifying their reputation as the cornerstone of market stability.

Bitcoin’s near-record price action had a way of reigniting conversations around profit-taking strategies and market resilience.

Whether this rally served as a precursor to even greater heights or a signal for caution, one thing remained clear: Bitcoin price continued to captivate both seasoned investors and fresh entrants.