Analyzing the recent fluctuations in Bitcoin prices, data analytics firm Glassnode reported that the cryptocurrency experienced a significant rally on March 26, with prices soaring to $71,375. Although this indicated a surge towards the record high, the ascent fell short of setting a new benchmark. The report sheds light on the factors contributing to this outcome.
Surge Triggers Profit-Taking Among Holders
Bitcoin previously reached its zenith at $73,750 on March 14. The climb triggered a wave of profit-taking by investors, reminiscent of patterns observed prior to past block reward halvings. The crypto asset then underwent a 16% decline. Glassnode’s weekly analysis highlighted a marked spike in selling as the cryptocurrency approached its apex, with over $2.6 billion in profits realized. Notably, most Bitcoin that slipped from profit into loss during the downturn had been acquired for more than $61.2k, and these assets had exchanged hands recently.
A significant amount of the sell-off, around 40%, came from long-standing investors. Additionally, exits from Grayscale Bitcoin Trust (GBTC) played a substantial role in this sell-off. Since GBTC’s transformation into a spot ETF in January, the fund has experienced hefty outflows, including a single-day outflow of $212 million on March 26. However, these outflows have been counterbalanced by the entry of nine new ETFs in the US market.
Market Dynamics and Altcoin Performance
Despite the sell-off, Bitcoin has maintained a relatively stable trading pattern and is valued around $70,000. This price represents a modest 4.6% dip from the March 14 all-time high. The overall cryptocurrency market capitalization stands at $2.79 trillion, 9.4% shy of its peak in November 2021. While certain altcoins like BNB, XRP, AVAX, and TON have seen minor losses, others, including DOGE, SHIB, and ICP, have recorded appreciable gains.