• Long and short-term Bitcoin holders continue strategic profit-taking as BTC hits new all-time high of $73,800
• Around $2.6 billion in realized profits taken via on-chain transactions when BTC touched $73,700 in March, 40% from long-term holders
• Flows into spot Bitcoin ETF market remain stable, with demand double the amount mined at any given time
Bitcoin holders have been engaging in strategic profit-taking, causing BTC to consolidate within a range according to Bitfinex analysts.
Long-Term Holders Reactivate Old BTC Supply
According to the latest Bitfinex Alpha report, long-term holders reactivating old BTC supply reflects the cyclical nature of the crypto market. It also shows patterns of distribution and accumulation among investors.
Magnitude of Profit-Taking Close to 2021 Bull Market Peak
Although the dormant BTC supply being sold is relatively small compared to previous bull tops, the magnitude of realized profit recorded by long and short-term holders is close to the 2021 peak.
When BTC hit $73,700 in March 2023, around $2.6 billion in profits was taken via on-chain transactions. 40% was linked to long-term holders, including Grayscale Bitcoin Trust redemptions.
Profit-Taking Increases Volatility and Range Trading
Analysts said the strategic profit-taking has increased BTC’s volatility, causing it to trade in a range after briefly hitting $70k. The aggressiveness of selling is shown in the SOPR remaining above 1.
Spot ETF Flows Stay Stable
Flows into spot Bitcoin ETFs have remained stable despite outflows from GBTC. Analysts said ETF inflows could alter Bitcoin’s inflationary nature by absorbing miner supply.
Conclusion
Strategic profit-taking by long-term holders has caused Bitcoin to consolidate within a trading range after reaching its all-time high. While volatility has increased, spot ETF demand continues to provide stability.
