After breaching the highly anticipated $100K level on December 5, Bitcoin's price encountered resistance and began consolidating below the six-figure mark. This price action sparked varying sentiments among traders, with bulls hoping for another leg up and bears anticipating potential corrections.
Top analyst Axel Adler shared valuable insights on X, highlighting a drop in the average volume of realized profit from $136M/day to $93M/day. However, Adler points out that these figures, when viewed in the context of 30-day moving averages, show that actual realized profits are still relatively high, especially compared to past market cycles.
According to Adler's analysis, which uses 30-day moving averages to track realized profits, the current levels are still strong, especially when compared to past bull cycles. For example, in September 2021 and 2024, mini-bullish rallies began when average daily realized profits were around $15M, a fraction of the current levels.
It's important to note that this analysis uses 30-day moving averages, which means that actual realized profits over the past 30 days are significantly higher than the daily averages reported here. For instance, on November 21, 2024, one month after the rally began at $98K, daily investor profits soared to $443M.
These metrics suggest that while Bitcoin is consolidating, underlying market activity remains strong, setting the stage for a potential bullish continuation. If BTC holds key levels, another surge to test or surpass recent highs could be on the horizon.
After losing critical levels, including the psychological $100K mark, the 4-hour 200 MA at $98,290, and the EMA at $96,480, Bitcoin is now trading at $95,400. This series of price breaks indicates short-term bearish price action, sparking concerns among investors about the potential for further downside.
However, some analysts suggest that this could be a move to generate liquidity before another push higher. This kind of volatility is not uncommon during consolidations near critical levels, especially after a significant rally like the one Bitcoin experienced in December.
The $95K mark now serves as a pivotal support zone for bulls. If BTC manages to hold this level in the coming hours, it could signal the end of this bearish phase and set the stage for a quick recovery. Reclaiming the $96,480 EMA would be an encouraging first step, while a move above the $98,290 4-hour 200 MA would confirm a return to bullish momentum.
Market participants are closely monitoring these levels, as a sustained hold above $95K could reignite confidence and set Bitcoin back on its upward trajectory. However, failing to maintain this support could lead to deeper corrections in the short term.
