Bitcoin (BTC) recently surpassed the $44,000 mark but faced resistance near the crucial $45,000 level, resulting in a subsequent price drop. Analysts and reports from CryptoQuant are shedding light on the expected movements in BTC’s price.
According to a CryptoQuant analyst, profit-taking by certain investor groups may have triggered the decline in BTC’s price. The analysis of on-chain data suggested that short-term holders and investors with a 6-18 month holding period began taking profits as BTC breached the $40,000 resistance.
The profit-taking was evident in the Coin Days Destroyed (CDD) metric, which measures the weighted age of spent tokens that have not moved in a long time. An increase in binary CDD indicates significant spending of BTC or long-held tokens. The analyst, Yonsei, pointed out that binary CDD was also active during BTC’s rally in early December, signaling recent activities of short-term investors.
Short-term holders have been selling their BTC at high profit margins, while a group of long-term holders with six-month-old Bitcoins sold their holdings just before the price fell from $44,000. In contrast, long-term investors are holding firm, expecting higher price levels.
CryptoQuant’s latest weekly report mentioned that the crypto markets have witnessed selling pressure from Bitcoin miners and whales. High miner outflow levels during the past week indicated that miners sold more tokens as BTC rose to $44,000 with an average profit margin of 40%. Although the bear market may be behind us and liquidity conditions in the crypto market have improved, Bitcoin is still trading around $41,000, approximately a 6% drop from its recent peak of $44,180.
