Bitcoin long-term holders are on the cusp of realizing unprecedented profits, a scenario that has historically led to significant selling pressure in the market. As the price of Bitcoin approaches the six-figure mark, data from Glassnode, an onchain analytics firm, suggests that older investors may be inclined to cash in on their gains, potentially triggering a wave of profit-taking.
According to Glassnode's latest newsletter, long-term holders (LTHs) of Bitcoin are currently sitting on nearly 350% unrealized profits. This level is seen as a crucial historical threshold that could prompt these investors to start selling their holdings. The firm notes that when the average long-term holder reaches a 350% profit margin, there tends to be an increase in selling activity.
The key price level to watch for changes in behavior among long-term holders is around $100,000. Glassnode explains that once Bitcoin reaches this price point, there could be a surge in sell-side pressure as investors look to capitalize on their profits. This could create a significant challenge for bulls to maintain upward momentum in the market, requiring strong buying demand to absorb the selling pressure.
Despite Bitcoin's recent rally to nearly $97,500, some traders remain cautious about the cryptocurrency's ability to sustain its upward trajectory. Order book data indicates a potential imbalance between buyers and sellers, with a notable concentration of sell orders around the $91,000 level. This suggests that there may be downward pressure on the price, posing risks for long positions at current levels.
Glassnode also highlights the importance of breaking and holding key resistance levels, such as the 111-day simple moving average (SMA), to confirm further price appreciation. The firm emphasizes that a rejection at these levels could signal a return to bearish territory, leading to significant unrealized losses for investors.
While Bitcoin has shown strength in its recent price surge, it is crucial for the cryptocurrency to maintain momentum above key technical levels to avoid a potential pullback. Traders are advised to exercise caution and conduct thorough research before making investment decisions, as the market remains volatile and unpredictable.
In conclusion, the current market conditions suggest that Bitcoin's long-term holders may soon start selling their holdings as the price approaches $100,000, potentially putting pressure on the cryptocurrency's price. Traders should closely monitor key levels and market dynamics to navigate the evolving landscape of the crypto market.
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