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Bitcoin hit a new all-time high yesterday, reaching $93,483, continuing its impressive rise without any major setbacks. Over the past nine days, the leading cryptocurrency has risen with minimal declines, and did not fall more than 5% during this bullish phase. This sustained price action has attracted widespread attention as Bitcoin defies expectations and resists any noticeable pullback.
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Key data from CryptoQuant reveals that traders’ unrealized profit margins are on the rise, suggesting that the market may be approaching a peak in the short term. High unrealized profit levels usually indicate that a correction may be on the horizon as investors look to lock in gains. However, given the current strength of Bitcoin’s price movement, the timing and magnitude of any correction remains uncertain.
With Bitcoin price momentum showing little signs of slowing, the coming days will be crucial in determining whether the market can maintain these levels or whether a healthy pullback is in store. Investors are closely monitoring potential entry points and key support levels, knowing that even minor dips could trigger strong buying interest as Bitcoin’s bullish phase continues.
Bitcoin’s strong movement about to pause?
Bitcoin’s price action has been notable, rising 38% since the US election and capturing widespread attention with its continued upward momentum. However, this strong rally may be coming to a temporary halt, as data points to a possible correction.
Head of Research at CryptoQuant, Julio Moreno, He recently shared a compelling chart Highlighting the unrealized profit margins of Bitcoin traders, which reached 47% – a level that often preceded price declines.
Unrealized profit margins can indicate that traders are making significant gains, increasing the likelihood of profit taking which could lead to a market slowdown. Moreno’s analysis indicates that this measure tends to be associated with increased risk of correction when it exceeds certain thresholds. For example, the previous peak in March reached 69%, while December 2023 saw unrealized gains reach 48%, both cases leading to notable corrections soon after.
However, the current level of 47% suggests that although caution may be warranted, Bitcoin’s bullish phase still has room to continue. Past cycles prove that the market may hold higher unrealized profits before it reverses. The data suggests that although a pullback may be on the horizon, Bitcoin could continue its upward trend for a little longer before any significant pullback occurs.
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In the coming days, investors will be watching closely for any signs of a consolidation phase or possible bounce. If Bitcoin maintains strong support levels, a continuation of this uptrend remains possible. However, if profit-taking intensifies, a correction could provide a healthy reset for Bitcoin to gather momentum for future gains.
BTC breaks its ATH almost every day
Bitcoin has broken its all-time high seven times over the past eight days, sparking extremely bullish sentiment across the market. Bitcoin is currently trading at $90,620 after peaking at $93,483, and Bitcoin price action remains strong, indicating continued buying momentum. This rally has created a noticeably optimistic tone, but a short correction period could provide a necessary reset after such an extended rally.
Given the high buying pressure, a pullback in the short term to create a new balance in the market would be a healthy development. This may allow Bitcoin to test lower demand levels and create stronger support areas for the next phase. If profit-taking intensifies in the near term, BTC may reconsider the $85,000 level as it seeks stability.
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In the coming days, investors will likely be watching this potential consolidation phase to gauge Bitcoin’s resilience. A successful retest of support around $85,000 would reaffirm confidence in the ongoing bull market, providing a stronger foundation for Bitcoin to push higher. Overall, while the trend is still bullish, a balanced correction may be what the market needs to maintain its momentum in the long term.
Featured image by Dall-E, chart from TradingView