Bitcoin holders, who had paused profit-taking in early May, have resumed selling their assets, according to observations by Bitfinex experts.
“Long-term bitcoin holders are selling again. The consistently high level of profit realization by this category of market participants indicates that bitcoin’s short-term prospects are vulnerable,” the report states.
This trend is unfolding despite the fact that the leading cryptocurrency is trading below the historic high reached in March. On the other hand, the scale of profit-taking is not as significant as it was after surpassing the previous cycle’s peak of $69,000.
According to CryptoQuant data, the SOPR indicator for long-term holders of digital gold has reached 2.7, the highest value ever recorded by the firm. Historically, extreme values of this metric have been accompanied by bitcoin price corrections.
The Bitfinex Alpha report also notes that profit realization during a bull market phase is generally normal. However, the current “scale of this activity is concerning.”
They suggest that the trend’s development could exert significant short-term pressure on bitcoin’s price. This could potentially prolong the recession and impact the market in the medium term.
Mt. Gox and Other Factors
This month, bitcoin’s price may face selling pressure due to the upcoming start of payments to Mt. Gox creditors. Digital assets worth over $9.4 billion are to be distributed among approximately 127,000 users of the exchange that went bankrupt in 2014.
JPMorgan analysts are confident that some of the returned bitcoins will be sold, significantly impacting the market. Experts anticipate a potential recovery after the dump in August.
Another negative factor is the potential selling pressure following recent transfers of digital gold to exchanges by German authorities.
However, Bitfinex noted positive factors as well: a decrease in bitcoin sales by miners and an increase in funds flowing into spot ETFs.
Earlier, CoinDesk analysts identified the $65,000 level as a key resistance level.