Bitcoin Daily Realized Profits Drop 42%, Signaling Reduced Profit-Taking Amid Market Consolidation

Bitcoin has experienced notable volatility over the past week, fluctuating between $92,000 and $98,000. After peaking at $99,400, it faced strong resistance and has since traded in a narrow range.

Bitcoin’s daily realized profits have declined by 42%, indicating a reduction in profit-taking activity as the market consolidates.

This drop in realized profits coincides with Bitcoin’s price movements within a narrow range, following its encounter with strong resistance at $99,400.

Currently priced at $95,782, Bitcoin experienced a 1.93% increase in the last 24 hours and 1.57% over the past week.

According to Glassnode, an on-chain analytics firm, Bitcoin’s market dynamics have shifted into consolidation, as evidenced by the flattening realized profits.

The data reveals that daily realized profits on exchanges have dropped significantly, moving from $481 million per day to $277 million per day.

This decrease in profit-taking activity suggests that many traders are maintaining their positions, contributing to Bitcoin’s stagnant price movements.

However, as highlighted by James Check, another analyst, long-term holders also play a role in influencing Bitcoin’s price behavior, particularly during consolidation periods.

Contrary to common perception, Check points out that long-term holders do sell at times, and their actions can impact the market.

He compares the market to a car, where demand acts as the accelerator and sell-side pressure serves as the brakes.

While demand remains strong, driven by institutional involvement and the launch of Bitcoin ETFs, the sell-side pressure from long-term holders has played a role in preventing Bitcoin from making substantial price gains.

This balancing act between buying and selling activity has created a market stuck in a holding pattern, unable to break above key resistance levels.

Despite the ongoing tension between the bulls and bears, industry experts like Tom Lee, Chief Investment Officer at Fundstrat, remain bullish on Bitcoin’s future trajectory.

Lee projects that Bitcoin will cross the psychological barrier of $100,000 before the year ends.

He emphasizes that this level is a crucial point of interest for traders and investors, and overcoming it could trigger a significant price movement.

Moreover, Lee anticipates Bitcoin reaching $250,000 in the next 12 months, driven by factors like institutional adoption and increasing support for cryptocurrencies within the U.S. political landscape.