CryptoQuant analyst released a new report pointing out that Bitcoin has entered a price correction period after reaching a new all-time high this month. The main reason for this is that traders are selling their holdings to realize high profit margins. However, this round of Bitcoin bull market cycle is far from over.
After breaking through the historical high of $67,500, Bitcoin entered a price correction phase, with a maximum decline of more than 17% from the peak to $60,775. In response to this, CryptoQuant analysts pointed out that miners, whales, and other market participants, including large investors, have started to sell Bitcoin to “take profits,” but it is judged that the Bitcoin bull market cycle is far from over.
Regarding the recent decline in Bitcoin, CryptoQuant believes that traders are selling their holdings to realize high profit margins. The unrealized profit rate has soared to 69%, reaching a new high since March 2021. However, despite the subsequent selling of Bitcoin by traders, the current unrealized profit rate is still as high as 47%.
As the price of Bitcoin soared above $70,000, large Bitcoin holders also began to sell. On the 12th, when Bitcoin reached its all-time high, they transferred a total of 567,000 Bitcoins, accounting for 35% of the total transfer volume on the Bitcoin network.
Some large holders are Bitcoin miners. With the rise of Bitcoin, mining revenue has reached a new historical high. With Bitcoin breaking through $70,000, there has also been significant growth in Bitcoin transfers by miners in OTC trading.
The bull market is not over yet. CryptoQuant further stated that the demand for Bitcoin in the US market has slowed down, and Coinbase’s premium has turned negative after Bitcoin reached a new all-time high. If Bitcoin continues to pull back, it may fall to $58,000 to $60,000, which is the cost basis for large short-term holders.
However, in the long run, CryptoQuant believes that Bitcoin has not yet reached the top of this bull market cycle. Currently, about 48% of Bitcoin buying funds come from short-term investors. Historically, when short-term investors account for 84%-92% of Bitcoin investment, the bull market cycle ends.