As it stands, the premier cryptocurrency maintains its broader bearish structure, with its price struggling to overcome the $68,000 resistance over the past few days. However, an interesting on-chain development suggests that the Bitcoin price could likely see a relief soon, but only after a certain condition has been met.
Realized Profits Show Warning Pattern That Precedes Defined Moves
In a recent Quicktake post on CryptoQuant, on-chain analyst MorenoDV revealed that Bitcoin whales have realized more than $208 million in profits. As shown by the Realized Profit By Whales metric, this event — where over $200 million is taken as profit by members of this cohort — marks the seventh such occurrence over the past two years.
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Notably, these spikes in profits-taken have not occurred without any impact on price; instead, they have often been followed by market turbulence, which has also mostly preceded the formation of local bottoms. This suggests that large-scale selling from seasoned holders tends to introduce temporary liquidity imbalances.
After the supply created by these whales is absorbed, it often leads to price stabilization. Interestingly, this stability has often preceded bullish reversals in the Bitcoin price. However, there have also been a few instances where such profit-taking among this investor cohort coincided with the establishment of local tops.
Nonetheless, MorenoDV explained that this profit-taking behavior among the Bitcoin whales typically signals conviction, due to the behavioral consistency of this investor class. As such, these large investors rarely sell impulsively, but when they do, “it signals conviction about near-term price exhaustion or strategic repositioning.”
Hence, if history is anything to go by, the analyst explained that the Bitcoin market stands a high chance of experiencing turbulence in the near-term. However, this also comes with the inference that the Bitcoin price is closer to a local exhaustion point than to the start of a bearish market cycle.
If institutional flows, or even mid-sized holders, begin accumulating at current levels, the market could interpret this as a healthy rotation, which could in turn translate into bullish momentum. On the other hand, if demand should remain insufficient or if more market participants sell their holdings, downside pressure could be amplified, thereby pushing prices further south.
Bitcoin Price At A Glance
At the time of writing, the price of BTC stands at around $67,960, reflecting no significant movement in the past 24 hours.
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Featured image by Dall.E, chart from TradingView