Bitcoin (BTC) price hit an all-time high of $108,365 on December 17 before falling below $105,000. The short-term decline comes ahead of the US Federal Reserve’s interest rate announcement on December 18. A 25bp cut in the current market.
Despite the short-term volatility, one cryptocurrency analyst emphasized that an optimistic scenario is taking shape, with long-term Bitcoin holders positioning themselves for future gains.
Bitcoin LTH revenue generation decreases from $10 billion to $3 billion
Bitcoin broke its all-time high in November 2024 with an incredible return of 37%, followed by a profit-taking frenzy. Cointelegraph reported that selling pressure in November reached 366,000 BTC per month and is estimated to be worth around $10 billion.
In light of this, Percival, a verified Bitcoin analyst at CryptoQuant, highlighted that the size of profit-taking has decreased significantly over the past three weeks.
Percival’s Bitcoin net profit take chart. Source: CryptoQuant
As the chart shows, profits realized by long-term holders decreased from $10 billion on November 25 to $3 billion on December 14, despite the BTC price rising 12% during that period. The analyst added:
“This means that LTH has realized most of its profits at this stage and is poised to see further growth.”
Percival also used a 90-day market vs. realized price gradient oscillator chart to explain that the index is in an equilibrium zone of 0.5, which indicates a neutral position between buyers and sellers.
Bitcoin 90-day market and realized price gradient chart. Source: CryptoQuant
A strong balance between the two sides showed the potential for a “bullish phase” as the cryptocurrency asset is neither overbought nor oversold.
Bitcoin price depends on Coinbase premium.
Despite the decline in profit taking and the positive development of a neutral trend, it is important to note that the Coinbase premium has been falling since early December. Anonymous cryptocurrency trader Yonsei Dent highlighted a “noticeable decline” in the premium associated with the BTC price over the past two weeks.
Bitcoin price difference based on Coinbase premium. Source: CryptoQuant
The inverse correlation suggested that BTC’s rally was not supported by demand from US investors. The analyst added:
“This could indicate an underlying weakness in the medium-term upward momentum. “Investors should exercise caution and monitor these developments closely.”
Despite BTC’s choppy market structure, independent cryptocurrency trader Daan Crypto said Bitcoin has followed last year’s price action. Traders expected prices to fall further into the penultimate week of 2024 before a “real breakout” in the first quarter of 2025.
Related: Why Is Bitcoin Price Down Today?
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.