A recent report from Glassnode found that after Bitcoin surpassed its all-time high of $73,000 in March, profit-taking for long-term holders began to decline.
Bitcoin’s March all-time high sparked significant profit-taking by long-term holders, but that activity is starting to taper off, a Glassnode Insights report said on Tuesday.
Profit taking, especially by long-term holders, typically intensifies when stocks hit record highs, but has been tapering off in recent weeks, according to the report.
The asset balance between long-term Bitcoin holders and new demand suggests that the market is currently entering the early stages of a euphoria or price discovery phase. However, historical analysis shows that these phases are prone to price corrections, with declines exceeding 10% common and declines exceeding 25% common.
The report highlighted that since Bitcoin hit an all-time high last March, there have been only two significant corrections of around 10% or more.
The upcoming Bitcoin halving is currently a major driver of market speculation. Sunny Lu, founder of VeChain, highlighted how regulatory developments will impact Bitcoin’s post-halving trajectory.
Lu compared the current cycle to previous cycles to highlight the impact of regulation on pricing decisions. Regulatory measures have played a significant role in driving significant price movements since the last halving in May 2020.
Lu pointed out that the latest price high was triggered by the spot Bitcoin ETF approval in March of this year, following the previous high following the Coinbase IPO in April 2021 and the approval of a Bitcoin futures ETF in November of the same year.
He emphasized a shift in focus from considering only supply dynamics to broader macroeconomic factors in understanding the impact of the halving. The evolving story now includes not only the mathematical effects of the halving on supply, but also the macro forces that affect prices.
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