Bitcoin Retraces Back From $30,000 As Profit Taking Spikes

Keshav Verma

1 year ago

3 mins read

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Bitcoin had surged above $30,000 earlier during the past day but has since observed a retrace as profit-taking from traders has spiked.

Bitcoin Profit-Taking Volume Is Currently More Than Twice The Loss-Taking One

Bitcoin showed some promising signs of breaking away from its stagnation earlier during the past 24-hour period, as the cryptocurrency’s price managed to make a sharp recovery towards the $30,000 mark. This surge, however, couldn’t last for too long, as the cryptocurrency has already slipped to the $29,700 level.

BTC has seen some rise during the past day | Source: BTCUSD on TradingView

So far, Bitcoin has been able to retain a lot of the recovery despite this pullback, as the asset’s price is still significantly above the $29,000 level it had been consolidating at prior to this move.

From the above chart, it’s visible that the current recovery surge looks quite similar to the one seen around the start of the month. This rally also died off at the $30,000 level and the price slid off, until it eventually ended up slumping back to sideways movement around the $29,000 mark.

It would appear that the $30,000 level was acting as a major source of resistance for the cryptocurrency back then, and it seems that its role hasn’t changed this time either.

There is one thing different this time, however, and that is the level of profit-taking that the investors are displaying. According to data from the on-chain analytics firm Santiment, the profit-taking in the market has observed a sharp increase as this rally has occurred.

The value of the metric seems to have been quite high recently | Source: Santiment on X

In the above graph, the data for the “ratio of daily on-chain transaction volume in profit to loss” metric is shown, which keeps track of how the profit-taking volume in the Bitcoin market compares with the loss-taking volume right now.

Clearly, this indicator has surged to some pretty high levels, meaning that the profit realization is far outweighing the loss realization at the moment. It’s not uncommon for this behavior to be seen during rallies, as some investors would want to quickly jump on the profitable opportunity while it’s still there.

This scale of the profit-taking, however, may be worrying. At the current level of the indicator, the profit-taking volume is more than double the loss-taking volume.

As can be seen from the graph, the metric had instead remained relatively muted when the aforementioned recovery rally of a similar scale had taken place earlier in the month.

This difference in behavior between the two Bitcoin price surges may be a reflection of how the investors have perceived each move. Earlier, they may have been more hopeful for further price rise, so they may not have been too keen on harvesting their profits just yet.

This time, however, the holders may be thinking that this rise will die out like the previous one as well, so they are using the opportunity to quickly exit from the market.

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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