Despite a recent price correction, many Bitcoin holders remain positive, although short-term holders are losing patience as BTC dips below the $42,000 support level. Analyst James Van Straten suggests that the total profit or loss across all cryptocurrencies could indicate a prolonged profit-taking phase in Bitcoin, a trend not seen in the last five years, with the only comparable event being the 2021 bull run.
Expectations are growing that the ongoing profit-taking around $40,000 may be nearing its end, which could increase selling pressure and concerns about a potential downtrend in the market. As investors prefer to realize profits in a stagnant or declining market, continuous selling could exert downward pressure on Bitcoin’s valuation.
This scenario could lead to a loss of confidence among investors, reducing market participation and potentially hindering a price recovery. The long-term profit-taking period could also indicate market fatigue or doubts about Bitcoin’s short-term prospects.
If the trend continues, it could deter newcomers from entering the market and prompt current investors to wait for clearer signs of an uptrend. Recently, short positions against BTC have increased from 48% to 51.52%, but a positive turn in BTC’s price could worsen conditions for investors.
Latest data suggests that if BTC surpasses the $44,000 mark, $1.21 billion in short positions could be liquidated, potentially triggering a short squeeze that could drive BTC’s price higher and inflict more damage on bears. At the time of writing, BTC’s price has seen a 1.27% decrease in the last 24 hours, trading at $41,084.39.