Cryptocurrency analysts have reported a notable 76% decrease in Bitcoin’s daily realized profit since the initial hype around the coin’s potential to reach $100,000 began to fade.
Market Overview
Looking ahead, short-term bearish price movements for Bitcoin are expected to be less drastic compared to the almost 10% plunge recorded last week.
This expectation arises from a significant reduction in selling pressure following Bitcoin’s momentary rise above six figures.
Analysts from Bitfinex shared insights in a market report, suggesting that any future declines might be more subdued than the recent severe drop.
On December 6, Bitcoin (BTC) suffered a considerable setback, dropping from $103,493 to below $93,000 within mere hours—a decline of nearly 10%.
This sharp downturn occurred just a day after Bitcoin had celebrated reaching the $100,000 milestone, as noted by CoinMarketCap.
The crash prompted approximately $303.5 million in liquidations of long positions in a single hour, culminating in total liquidations of $404 million over the following 24 hours, according to Cointelegraph.
Signs of Stabilization
Despite the volatility, analysts from Bitfinex have detected early signs that the market may be on the brink of stabilization.
They pointed out that the Realized Profit (RP)—which illustrates the USD gains from coins that have been transferred—had surged to $10.5 billion daily during Bitcoin’s rapid climb toward $100,000 but has since dwindled to around $2.5 billion.
This sharp decline indicates that the trend of profit-taking by traders has slowed significantly, suggesting fewer panic-induced sell-offs in the future.
As of the report’s release, Bitcoin’s trading price hovered around $97,483, per CoinMarketCap.
The Bitfinex analysts noted another hopeful trend: Bitcoin’s funding rates seemed to be settling, hinting at a possible shift towards a more balanced market dynamic.
This development could lessen volatility and lead to more stable price actions in the medium term.
The current funding rate on Binance, one of the largest cryptocurrency exchanges, was recorded at 0.01%, according to figures from CoinGlass.
Long-Term Outlook
However, James Check, lead analyst at Glassnode, raised some concerns about the idea of market stabilization.
He emphasized the heavy selling pressure coming from existing holders, which, in his view, currently outweighs the demand generated by exchange-traded funds (ETFs) and MicroStrategy (MSTR).
Check noted that long-term investors are realizing significant returns, with their average purchase price sitting around $24,481—translating to an impressive 400% profit.
Recent insights have suggested that Bitcoin’s rapid ascension to the $100,000 level has prompted many long-term holders to cash out, leading some analysts to ponder whether this behavior signifies a potential market peak.
The situation has been likened to a game of musical chairs, where one CryptoQuant contributor advised traders to remain cautious and alert as market conditions evolve.
Source: Cointelegraph
