- CryptoQuant warned that persistent profit-taking might temporarily drag the price of Bitcoin to a key support at $110K.
- Nevertheless, bullish sentiment remains amid the price cooldown.
Bitcoin (BTC) recently dived to mirror its price at the start of August. In the last 24 hours, the largest cryptocurrency asset with $2.26 trillion market cap swung between a $114,310.18 high and a $112,387.96 low, representing around 1.68% price fluctuation on the downside.
Trading volume also slowed by 9.5% within the timeframe as only $72.83 billion worth of BTC moved across wallet addresses and crypto exchanges.
Bitcoin Sentiment Remains Positive Despite Weakened Price Momentum
According to CryptoQuant, an on-chain analytics platform, the demand for Bitcoin has slowed down. This has also trickled to spot BTC exchange-traded funds (ETFs) in the US and Strategy’s purchases in the past few weeks.
The company said apparent demand in BTC dipped significantly from its peak in July at 174K BTC to 59K BTC this Wednesday. The numbers represented a two-thirds reduction.
Additionally, the 30-day institutional demand for BTC slumped, with the net purchases of institutional investors sliding to their lowest since April to 11K BTC. Meanwhile, Strategy’s accumulation tamed from 171K BTC during the November highs to just 27K BTC in the same period.
Moreover, Cryptoquant noted that its Bull Score for Bitcoin dropped from “Extra Bullish” to a “Bullish Cooldown” phase as the premier crypto asset lost its hold of the $120K zone. However, it clarified that the market is still positive, but the strength of BTC’s bullish momentum from July has waned as the price somehow stagnated in the aftermath of a new all-time high of $124,457.12 last week.
Brace for More Profit-Taking
CryptoQuant warned investors to remain on guard due to the ongoing profit-taking phase. It claimed that Bitcoin holders have logged net profits of $74 billion since July 4. On the same date, realized net profit spiked to $9 billion, the largest profit-taking so far this year.
By August 16, new whale investors recorded $2 billion in realized profits. It underscores that the trend may continue in the near term.
$110K Support Imminent
Cryptoquant highlighted that downside risk appears limited as investors await the speech of Federal Reserve Chair Jerome Powell at the upcoming Jackson Hole Symposium, which will take place on August 21 to 23. Nonetheless, it expects BTC to find support at $110K amid the short-term market tension. Even the price of gold notably fell as the public awaits the Fed’s update on the world’s largest economy’s monetary policies.
The analytics firm explained that the area indicates the Trader On-Chain Realized Price, a price support during bull markets. At such a level, the unrealized profit margin of traders heads to zero, which could put the brakes on their heavy selling pressure.
Final Thoughts
The analysis here is only for informative purposes. It’s based on limited parameters and may fail to account for other crucial factors in the market. Hence, readers should not consider the facts presented here as financial advice or product endorsement from the author or the Blockzeit team.
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