Bitcoin’s Realized Profit Drops 76% as Market Stabilization Signals Emerge Amid Eased Sell-Side Pressure

• Bitcoin’s price fluctuations are causing a stir in the crypto market, with recent analytics indicating a significant drop in realized profits.

• As the initial excitement around Bitcoin reaching $100,000 fades, pressure on long positions has notably decreased, signaling possible stabilization.

• “With such a decline in realized profit and sell-side pressure, we can expect future declines to be less abrupt than the one experienced last week,” asserted a report from Bitfinex analysts.

Bitcoin’s price sees fluctuations post the $100K hype, with realized profits dipping 76%. Analysts suggest sell-side pressure is easing.

Signals of Easing Sell-Side Pressure Emerge

On December 6, Bitcoin (BTC) experienced a remarkable drop of almost 10%, plummeting from $103,493 to below $93,000 within a single day, following its first breakthrough past the $100,000 threshold on December 5, as per CoinMarketCap data. This significant price drop has sparked discussions around market behavior.

Recent reports indicate that Bitcoin has since gained 0.34% over the past week, bringing its current trading value to approximately $97,483, according to CoinMarketCap. Amid this volatility, Cointelegraph highlighted that the surprise price decline, from $98,338 down to $92,957, resulted in liquidations exceeding $404 million within 24 hours, alongside $303.5 million liquidated in long positions in just one hour.

Despite these fluctuations, analysts from Bitfinex note that signs of “market stabilization are emerging.” Specifically, the Realized Profit (RP), which tracks gains from moved coins, initially skyrocketed to $10.5 billion daily during the ascent toward $100,000 but has since plummeted to around $2.5 billion per day, indicating a drop of 76%. This suggests that profit-taking activity has drastically cooled, potentially leading to “less dramatic” sell-offs in the future.

Furthermore, Bitcoin’s funding rates are reportedly stabilizing. At the time of this publication, the current funding rate for Bitcoin on Binance—the world’s leading crypto exchange—stands at a mere 0.01%, according to data from CoinGlass.

Analysts Voice Mixed Perspectives on Market Stabilization

Despite the signs of stabilization, discrepancies in market sentiments remain. Glassnode lead analyst James Check expressed skepticism, indicating a “tremendous” sell-side pressure from current holders that may overshadow demand from exchange-traded funds (ETFs) and MicroStrategy (MSTR). “There are lots of heated signals,” Check posted on December 9, illustrating the uncertainty lingering in the crypto market.

Long-Term Holders Benefiting from Significant Gains

The average price paid by long-term Bitcoin holders—the Long Term Holder Realized Price—now sits at $24,481, showcasing an average gain of approximately 400% for these investors. This number underscores the profitability experienced by long-term holders amidst the ongoing price adjustments.

Additionally, recent findings from Cointelegraph highlight that this climb towards $100,000 has prompted many long-term holders to offload portions of their holdings, which some analysts view as indicative of potential market peaks that could catch short-term traders off-balance as demand subsides.

“It’s a game of musical chairs: enjoy the ride, but be prepared when the music stops,” elaborated CryptoQuant contributor Maartuun, warning traders to remain aware of market dynamics as they navigate the current landscape.

Conclusion

In summary, the recent volatility surrounding Bitcoin indicates a complex interplay of profit realization and sell-side pressure, underscoring the importance of monitoring market trends closely. With recent data suggesting less aggressive selling patterns and signs of stabilization, traders and investors should remain cognizant of the ongoing shifts in demand and market behavior, keeping a balanced outlook as the landscape evolves.