Bitcoin is going through a phase of intense volatility. As its price flirts with historic levels, one question haunts investors' minds: are recurring profit-takings really slowing its progress? This is a dilemma that the market often faces, between bullish euphoria and realism of profit-taking.
Profit-taking: a natural mechanism, but a double-edged sword
When an asset like Bitcoin soars, it’s natural for many holders to want to lock in their gains. This “profit fever” clearly illustrates that every price increase leads to a wave of selling. But should this be seen as an insurmountable obstacle to BTC’s progress? Not necessarily.
Indeed, profit-taking does not mean the end of a bull run. It can even indicate a simple breathing phase of the market.
Bitcoin, having experienced significant corrections before, has often shown its resilience by recovering from sell-offs. Long-term holders remain optimistic, supported by strong technical indicators.
“We should not underestimate the risk that these successive profit-takings will weigh on BTC's bullish momentum.
When selling pressure combines with major technical resistances, the market can get stuck in a stagnant phase, as is the case around $63,900 currently.
Are the indicators showing a temporary slowdown or pause?
Previous cycles show that every bullish period sees significant profit taking.
Yet these interim corrections never really ended the market's momentum. On the contrary, they often served to strengthen the buyer base, eliminating weak positions and consolidating the market before the next bullish push.
Analysts, like Axel Adlersignal that Bitcoin may not have reached its peak yet. The LTH/STH SOPR ratio, a key indicator of profit-taking behavior, shows that the dynamics of previous cycles have not yet been replicated.
Long-term holders, usually the most cautious, have not yet massively liquidated their positions, suggesting that the uptrend could continue.
But beware, every cycle is unique. The recent approval of the Bitcoin spot ETF and the dynamics surrounding the BTC halving in 2024 could influence the very nature of the market this time around.
This means that even if one-off profit-taking occurs, it may not have the usual effect of abruptly slowing Bitcoin's progress.
The resistance at $63,900: a threshold to watch
Bitcoin’s recent moves show some difficulty in breaking through the $63,900 mark. This level is crucial because it represents the 200-day moving average, a technical indicator that is often decisive for institutional investors.
Until this resistance is broken and transformed into support, it is difficult to predict a new sustainable bullish momentum.
However, if Bitcoin manages to break above this key area, the potential for a fresh push towards all-time highs becomes possible again. Whales, those large holders of BTC, continue to take profits, but as long as the majority of buyers remain confident, BTC could resist this selling pressure.
Maximize your Tremplin.io experience with our 'Read to Earn' program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
