Bitcoin’s recent rally from $24,000 to $28,000 has come to a halt due to two key factors, according to data provided by CryptoQuant. The first reason for the pullback is that short-term holders who bought Bitcoin recently decided to take profits and exit their positions at their realized price. These investors, who are also known as day traders, have been selling off their Bitcoin holdings, which has added selling pressure to the market and led to a decline in Bitcoin’s price.
The second reason for the pullback is that large investors or “whales” holding between 1,000 and 10,000 BTC have been spending more of their Bitcoin than usual when the price was around $28,000. This has resulted in their daily spending increasing above 320,000 Bitcoin, which is 34% of the total BTC being spent.
This is the highest percentage of total BTC being spent since December 2022. As a result of this selling pressure, there has been a divergence between the price, which has been increasing, and the whales’ BTC holdings, which have been falling to their lowest level since early February.
It is important to note that the 6-12-month-old coins realized price, which currently stands at $26,800, seems to be defining the mid-point of the new price range that Bitcoin has reached recently. This price point is now functioning as a support and resistance level when the volatility increases, providing some stability for investors.
The recent pullback in Bitcoin’s price has come as a disappointment to some investors who were hoping for the rally to continue. However, experts suggest that this is a healthy correction for the market, and it is not uncommon for Bitcoin to experience such pullbacks after a significant rally.
Despite the recent pullback, the overall sentiment for Bitcoin remains bullish, and experts predict that the cryptocurrency will continue to increase in value over the long term. As such, investors are advised to take a long-term perspective when investing in Bitcoin, rather than focusing on short-term gains.
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This article was republished from azcoinnews.com
