Bitcoin’s realized profit has significantly declined, dropping 76% following its surge toward $100,000. After Bitcoin briefly surpassed the $100,000 mark on Dec. 5, it dropped almost 10% within 24 hours, falling from $103,493 to under $93,000 by Dec. 6. This sharp drop led to over $303.5 million in liquidations, with total liquidations for the day reaching $404 million. Despite this volatility, analysts believe future price drops may not be as abrupt, due to reduced sell-side pressure.
The decline in realized profit, which tracks the USD gains from moved coins, peaked at $10.5 billion daily during Bitcoin’s rise. It has since fallen to about $2.5 billion, reflecting a significant cooling in profit-taking. Bitfinex analysts have noted that this drop in realized profit indicates further sell-offs might be less dramatic. Additionally, Bitcoin’s funding rates are stabilizing, suggesting that the market could be entering a more balanced phase, with less erratic price movements expected in the medium term. Bitcoin was trading at around $97,483 at the time of publication.
However, some analysts, like James Check from Glassnode, remain cautious. He pointed out that the sell-side pressure from current Bitcoin holders is still overwhelming demand from institutional buyers such as ETFs and MicroStrategy. Despite signs of market stabilization, Check warned that these selling pressures could continue to put downward pressure on Bitcoin’s price. He also noted that there are still several "heated signals" in the market, signaling ongoing uncertainty.
Long-term Bitcoin holders, whose average purchase price is $24,481, are sitting on substantial profits, with a 400% average gain. However, long-term holders’ growing offloading of Bitcoin has raised concerns among analysts. The significant sell-offs could indicate that Bitcoin may be reaching its peak, and as buy-side demand starts to wane, it could trigger a shift in the market. Some have likened the situation to a game of musical chairs, where traders must be prepared for a potential change when the rally ends.
While there is a sense that the market may be finding its footing, the future of Bitcoin’s price remains uncertain. The easing of selling pressure could result in a more stable market, but with the heavy influence of long-term holders and institutional demand still in play, the situation is far from settled.