Bitcoin: Investors Take Profits as Cryptocurrency Surges Above $27,000 Mark
Data from on-chain analytics firm Santiment reveals that the volume of profit-taking transactions for Bitcoin has increased significantly after briefly breaking above the $27,000 mark.
🤑 With #Bitcoin jumping above $27k for the first time since June 12th, there are 2.4x as many profit transactions as loss transactions on the $BTC network since Wednesday. Markets are very polarized with #FOMO and drop fears both happening simultaneously. https://t.co/riPv1JYnfg pic.twitter.com/AsZ3485KDR
— Santiment (@santimentfeed) March 17, 2023
This level of profit-taking hasn’t been observed since December 2020. The “ratio of daily on-chain transaction volume in profit to loss” indicator measures the difference between the Bitcoin volume of profit-taking transactions and loss-taking ones.
A positive value indicates higher profit volume, while a negative value indicates lower profit volume. The current indicator value for Bitcoin is 1.4, indicating that profit-taking transaction volume is 2.4 times more than loss-taking volume.
This surge in profit-taking suggests that investors are cautious about a potential price drop and took profits as soon as the price surpassed $27,000, which caused a pullback to the $26,000 level.
Ethereum‘s profit-taking volume has also increased but to a lesser extent. As of writing this, Bitcoin is trading at around $26,800, which is up 34% from last week.
It’s worth noting that several factors, including increased institutional adoption and a growing acceptance of cryptocurrency as a legitimate asset class, have fueled the recent surge in Bitcoin’s price. However, the market has also been experiencing increased volatility, which could be driving some investors to take profits to mitigate their risks.
It remains to be seen how the market will react to these profit-taking transactions and whether Bitcoin will continue to experience upward momentum in the coming weeks and months. Nonetheless, the current trend suggests that investors are keeping a close eye on the market and taking advantage of profitable opportunities as they arise.