After temporarily halting their profit taking in early May, digital gold hodlers have started selling their assets again, according to Bitfinex experts.
Owners of Bitcoin for the long haul are selling once more. “The short-term prospects for Bitcoin are vulnerable” due to the consistently high level of profit realization by this category of market participants, according to the report.
The first cryptocurrency is trading lower than its all-time high from March, but that hasn’t stopped the trend from developing. However, compared to after surpassing the prior cycle high of $69,000, the magnitude of profit taking is much smaller. In the context of digital gold holders with a long-term horizon, the SOPR indicator value hit 2.7, the highest value in CryptoQuant’s observations history. In the past, Bitcoin price corrections have occurred in tandem with extremely high values of the metric.
Additionally, it is common practice to realize profits during bullish market phases, according to the Bitfinex Alpha report. Still, things are looking up in terms of the “scale of this activity.”
They claim that the trend’s progression might temporarily significantly impact Bitcoin’s price. In the medium run, this might impact the market and make the recession last longer.
Many variables, including Mt. Gox
Payments to Mt. creditors are set to begin this month, which might put downward pressure on the price of Bitcoin. Mx. Gox. About 127,000 people who used the defunct exchange in 2014 will get digital assets with a combined value of over $9.4 billion.
Experts at JPMorgan are certain that the market will react strongly to the sale of some of the returned bitcoins. In August, experts anticipate a possible recovery following the dump.
The possibility for selling pressure following the German government’s recent transfers of digital gold to exchanges is another negative aspect.
Bitfinex did find some bright spots, though, including an uptick in investment in spot ETFs and a slowdown in miners’ aggressive bitcoin sales. Analysts from CoinDesk had previously identified $65,000 as a significant resistance level.