Seeing a profit of nearly 78% after five months, Pham Huy quickly took profits from Bitcoin when this cryptocurrency tested the historic milestone of 100,000 USD in a short time.
Huy just sold about 0.018 Bitcoin (BTC) last weekend when the largest cryptocurrency in the world was on the verge of setting a new record of 99,655 USD per unit. This is the amount of BTC he bought at the beginning of July when this coin was priced around 56,000 USD.
This investor put money in when the market was down about 26% from the old peak in mid-March. After that, Bitcoin remained almost flat and tended to adjust to lower price levels for over three months. Many times Huy intended to sell out of fear that the cryptocurrency would 'crash' like some predictions or rumors in investment groups before the news of supply being released in large amounts from the German government and the Mt Gox trust exchange. However, he still believes in Bitcoin's potential as many large financial institutions are rushing to learn about the market, which at least increases the number of buyers helping to balance the market in a bad situation.
Huy expects BTC to reach 100,000 USD at the beginning of next year when President Donald Trump takes office and implements policies to support the market. But this seems likely to happen sooner. According to an investor with 4 years of experience, this is a sign that the market is overly excited compared to reality. For that reason, he chooses to take profits right now.
"I believe that haste will lead to failure; it's best not to be too greedy in investing," he said.
Not only Huy, but many other individual investors are actively taking profits as Bitcoin approaches the 100,000 USD mark. Data from the market analysis company Glassnode shows that retail investors, also known as 'small fish' investors, have sold about 75,000 BTC (approximately 7 billion USD) in the past month. This is the largest profit-taking by this group since Bitcoin broke its all-time high last March.
CoinDesk quoted Gracy Chen, CEO of the cryptocurrency exchange Bitget, explaining that the 100,000 USD milestone could create a barrier, at least in the short term, for investors, causing them to quickly take profits after BTC has increased by 40% in just two weeks. This psychological barrier forces investors to reassess their positions, leading to a natural sell-off. This is also commonly seen in other asset classes when there is rapid growth.
"If Bitcoin surpasses the important milestone mentioned above, it is highly likely that a pullback (price moving against the market trend in the short term) will occur," he noted.
In the opposite direction, the buyers of Bitcoin from the 'small fish' are actually the 'sharks' - those holding balances of 100-1,000 BTC. At the same time, the group of large investors has accumulated over 140,000 units. This shows that the 'sharks' still expect an increase in cryptocurrency.
With retail investors holding about 15% of the supply, their recent rush to take profits has pushed Bitcoin's price down significantly. After a few days of trading around 98,000-99,000 USD per coin, BTC dropped nearly 4% this morning to around 94,000 USD, at one point falling below 93,000 USD.
The trend of taking profits is quite different from many people's predictions that this is the time when many individual investors are buying in, chasing Bitcoin's peak. Because of this, experts are evaluating that the retail group no longer represents the 'less intelligent' money flow in the cryptocurrency market.
Previously, many studies indicated that the 'small fish' group has matured significantly in investment behavior. Retail investors in the short and medium term have often taken measures to anticipate the market simultaneously or sometimes even earlier than the 'sharks'. They have learned how to identify reasonable buying points instead of guessing the bottom, and they are also willing to sell as soon as they achieve their expected profit instead of waiting for the next price peaks.
For long-term investors, more and more people are adopting the Dollar Cost Averaging (DCA) method. Investors will buy cryptocurrencies at an average price by spreading their investments over multiple transactions, rather than putting in a large amount of capital upfront. This method helps them remain stable during price adjustments, avoiding the situation of chasing prices when the market is euphoric or panicking when prices drop significantly.
