Bitcoin Profit-Taking At 2-Month High, Pullback Incoming?

Keshav Verma

Last Updated: June 11, 2024 8:10 am

3 mins read

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On-chain data shows the Bitcoin profit-taking has risen to a two-month high, which could provide resistance to the BTC surge.

Bitcoin Profit-Taking Volume Has Shot Up With The Price Rise

According to data from the on-chain analytics firm Santiment, investors have started to take profits following the latest cryptocurrency price increase. The relevant indicator here is the “ratio of daily on-chain transaction volume in profit to loss,” as its name already implies, it tells us how the profit-taking volume in the market currently compares against the loss-taking one.

The indicator separates these two volumes by going through the on-chain history of each coin being sold/transferred on the network to see what price it was previously moved at.

If this last selling price for any coin was less than the current spot price, the sale of that particular coin contributes to the profit-taking volume. Similarly, their transactions would count under the loss-taking volume for the opposite type of coins.

When the indicator has a value greater than zero, the profit-taking volume is currently overwhelming the loss-taking volume. On the other hand, values under this mark suggest that loss-taking is currently the dominant behavior among investors.

Now, here is a chart that shows how the value of this Bitcoin indicator has changed over the past month:

Looks like the value of the metric has surged to a high value in recent days | Source: Santiment on X

As displayed in the above graph, the indicator’s value has risen as Bitcoin’s rebound from the $25,000 level occurred during the past few days. This suggests that the investors have started increasing their profit-taking volume.

During the past day or so, the metric has seen exceptionally high values, as the difference between the profit-taking and loss-taking volumes is at a two-month high now.

Usually, profit-taking is a normal sign during price rallies. Still, considering that this latest increase in BTC’s value isn’t too extraordinary, the level of the profit selling may be a cause for concern.

Perhaps some of the holders selling here have lost hope for the asset after it has been stuck in consolidation for some time now. These investors might be jumping on this relatively minor exit opportunity because they don’t think a better one will emerge shortly.

In the chart, Santiment has also attached the data for another metric: the active addresses. This indicator keeps track of the total number of addresses taking part in some transfer activity on the blockchain daily.

It’s visible that this metric has been at notably high values in the past few days, suggesting that many traders have been paying attention to the cryptocurrency.

While sellers may be present in the market, the high activity could also suggest the presence of buyers. It remains to be seen whether the profit-takers would pull the asset back down, or if the buyers are strong enough to hold them off.

BTC Price

Bitcoin had climbed to the $26,700 mark yesterday but dropped back under $26,500 today.

BTC has observed a net rise during the past few days | Source: BTCUSD on TradingView

Featured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, Santiment.net

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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