Bitcoin Profit-Taking Drops 93% From December Peak – What’s Next For BTC?

By Investor Empires On Jan 23, 2025

This article is also available in Spanish.

After testing the low $90,000 price level several times over the past two months, Bitcoin (BTC) briefly broke out of a narrow trading range earlier this week, hitting a new all-time high (ATH) of $108,786. However, a recent report from Glassnode suggests that the ongoing consolidation observed in recent months may be coming to an end, with the leading cryptocurrency gearing up for its next release. prominent It moves.

A sharp decline in Bitcoin profit taking

According to another edition According to Glassnode’s “The Week On-Chain” report, BTC profit-taking volumes have declined significantly, falling from summit From $4.5 billion in December to about $316.7 million – a sharp decline of 93%.

source: Vitreous node

This decrease in profit taking indicates a significant reduction in selling pressure on Bitcoin. Currently, Bitcoin trades within a narrow 60-day price range, a pattern that has often preceded significant market volatility.

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When Bitcoin is trading in a narrow price range, it indicates either the beginning of a bull market rally or the final stages of a bear market Surrender. One of the key metrics highlighted in the report is realized supply density, which measures the concentration of Bitcoin supply around the current spot price within a 15% range, both up and down.

Currently, approximately 20% of Bitcoin supply falls within this price range, indicating increased price sensitivity. Small price movements within this range can significantly impact investors’ profitability, fueling market volatility.

The report also points to the key metric, CoinDay Destruction (CDD), as further evidence of reduced sell-side pressure. During late December and early January, due diligence values were significantly high, reflecting increased long-term bondholder activity. However, the scale has calmed down in recent weeks.

For starters, CDD measures the economic activity of Bitcoins consumed by tracking how long the coins are held before they are transferred. It multiplies the number of coins by the number of days they have been dormant, shedding light on whether long-term coin holders are spending their coins.

The recent decline in CDD indicates that many BTC investors who planned to take profits have already done so within the current price range. As a result, the market may enter a new price range to open the next wave of supply and liquidity.

Long-term investors return to accumulation mode

The report also highlights the Long Term Holder (LTH) Binary Spending Index, a key metric that tracks Bitcoin held by long-term investors. The report indicates:

Consistent with the large profit-taking volumes from before, we can see a significant decline in total LTH supply as the market reached $100k in December. The rate of LTH supply decline has since stalled, suggesting an easing of this distribution pressure in recent weeks.

Additionally, LTH inflows to cryptocurrency exchanges declined sharply, falling from $526.9 million in December to just $92.3 million. However, the total supply of LTH BTC is showing signs of growth, indicating that long-term investors are as well Return to accumulation mode.