Bitcoin Profit-Taking Explained

Who is affected by the new profit-taking trend

Bitcoin holders are currently in profit, but the lack of buyers is a concern. The price action lacks strength to confirm a bottom, putting the $75k level in focus.

This level represents the short-term holder (STH) cost basis in the current cycle. With Bitcoin trading nearly 10% above this level, STHs are still sitting on profits.

What the $80k support means for Bitcoin

The $80k support is crucial for Bitcoin, and a breakdown below this level could put $75k in focus next. This is especially true if STHs take profits at the first sign of weakness.

According to Maksym Sakharov, any bearish catalyst could trigger fresh selling pressure and put this support to the test. About 86% of Bitcoin deposited into exchanges in early October came from STHs in profit.

By the numbers

• 86% of Bitcoin deposited into exchanges in early October came from STHs in profit.
• $377.58 million worth of Bitcoin was moved from a dormant wallet, reactivated after years of inactivity.
• $6.8 billion per day is the average Spot and U.S. Spot Bitcoin ETF volume, indicating a lack of market liquidity.

How dormant supply affects Bitcoin's price

Bitcoin's dormant supply is meeting selling pressure, making the cryptocurrency vulnerable to further price declines. Another OG Bitcoin wallet has been reactivated after years of inactivity and moved 4,582 BTC.

This follows last week's activity from another whale wallet, which moved 4,500 BTC worth $375.72 million from the account after being inactive for over four years.

What the Long-Term Holder (LTH) SOPR indicates

Bitcoin's LTH SOPR has crossed above its yearly average of 1.10, and now stands at 1.25 on a weekly basis and 1.16 on a monthly basis. This indicates that LTHs are back to profit territory.

With dormant wallets active again, the potential for profit-taking and additional selling pressure is now worth watching. Sakharov noted that with more investors sitting on profits after September's recovery, the risk of profit-taking has increased.

What happens if Bitcoin breaks below $80k

If Bitcoin breaks below $80k, the next key level to watch is $75k. This is the STH cost basis in the current cycle, and a breakdown below this level could lead to further selling pressure.

The current Bitcoin setup indicates potential sell-side pressure and low liquidity, meaning that if STHs continue to lock in gains and inactive wallets return to the market, BTC will fail to hold the $80k support zone.

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Implications for Bitcoin investors in India

For Bitcoin investors in India, the current profit-taking trend and selling pressure may lead to a decrease in the cryptocurrency's price. It is essential for investors to be cautious and consider their investment strategies carefully.

What to watch next in the Bitcoin market

Investors should keep an eye on the $80k support level and the potential for further selling pressure. Additionally, the activity of dormant wallets and the LTH SOPR will be crucial in determining the next move for Bitcoin.

Expert perspective on Bitcoin's future

Experts like Maksym Sakharov and Gorjan Kolev are closely watching the Bitcoin market, and their insights can provide valuable guidance for investors. Sakharov notes that the risk of profit-taking has increased, while Kolev cites scarcity as a key factor in tracking BTC's next move.

Bitcoin's price volatility and its impact on investors

Bitcoin's price volatility can have a significant impact on investors, and it is essential to understand the factors that contribute to this volatility. The current profit-taking trend and selling pressure are just a few of the factors that can affect Bitcoin's price.

Regulatory environment and its effect on Bitcoin

The regulatory environment can also impact Bitcoin's price and the overall cryptocurrency market. Investors should stay informed about any changes in regulations and how they may affect the market.