In a splendid and unexpected move, the Bitcoin price soars by over $4000 in a day to hit a high of $64,000 during the previous trading day. With this, the market sentiments have turned extremely bullish, with greed slowly piling up among the traders. The market participants now appear to be hopeful of the price reaching a new milestone but the bulls are required to display their strength for some more time, which could validate a run towards $100K.
The BTC price marked its journey from levels below $16,000 to $64,000 in 16 months and appears to have overcome all the bearish pressure. However, a major obstacle may be awaiting the BTC price; if cleared, the ongoing bull run may receive the required boosts.
The onchain data shows the BTC supply in profit has reached the levels that have led the price to mark the top in 2021. The metric ‘supply in profit’ measures the percentage of the total circulating BTC supply carrying some unrealized gain that has shot up recently.
The above chart shows the Bitcoin supply in profit has soared high to reach levels beyond 19.52 million out of 19.64 million tokens in circulation, nearly 95%. This means that 95% of all UTXOs are in profit, which may not be a good thing for the Bitcoin bull run. The main reason behind this is the investor’s mindset, as they could be more prone to book their profits at any point from now on. When a huge share of BTC is in gains, the probability of mass sell-offs could spike.
To validate the above claim, let’s look at the long-term chart of the Bitcoin price.
The BTC price remains under bullish influence as the markets have turned extremely bullish. However, following the 2021 bull run, Bitcoin gained significant attention and increased adoption rates. As a result, market participants were eager to acquire the tokens at discounted prices. As a result, when BTC’s price fell $25,000 to lows below $16,000 before recovering and reclaiming the levels at $28,000, volume reached unprecedented levels in history.
This suggests that the majority of traders may have already accumulated enough and are waiting for the right time to cash in. Therefore, now that 95% of the supply is in profits, this could be flashing a huge’sell’ signal for the Bitcoin (BTC) price. Therefore, traders are required to be more cautious as the star crypto is about to attempt to enter the critical price zones in history.
Credit: Source link
