- Bitcoin short positions worth $106 million were wiped out in the last 24 hours.
- “Extreme Greed” sentiment pervaded the market, raising fears of a correction.
Bitcoin [BTC] was within touching distance of reclaiming its previous all-time high (ATH), marking a spirited recovery from bear market depths in late 2o22.
The world’s largest cryptocurrency broke through $68k in the last 24 hours, before profit-taking pulled it back to the $67k region as of this writing, according to CoinMarketCap.
The uptick forced a liquidation of $106 million worth of Bitcoin short positions in the last 24 hours, according to AMBCrypto’s examination of Coinglass’ data.
Source: Coinglass
Everyone’s in profit
The past day’s move catapulted Bitcoin network’s profitability to a perfect 100%, as seen by AMBCrypto through Santiment data.
Moreover, on an average, Bitcoin holders had unrealized profits of nearly 20% on their investments, according to the reading of 30-day MVRV Ratio.
Source: Santiment
While this was an impressive feat, be mindful that high profitability means high incentive to sell. This could potentially halt Bitcoin’s rally in the days ahead.
Additionally, the Bitcoin Fear & Greed Index hit 90 for the first time in two years. The value indicated “Extreme Greed” market sentiment, raising fears of a strong correction.
“Ignore the short-term blips”
Typically, it’s the short-term investors, also referred to as the “weak hands”, who contribute to volatility and price fluctuations.
A CryptoQuant author showed how there has been a surge in the influx of new investors into the Bitcoin market in the last week. He noted that such levels were last seen during the early bull market period of last cycle.
The author added that increased number of short-term investors could lead to significant price corrections in the small to medium term, even in the range of 20%-30%.
But he advised investors to be bullish during these periods and refrain from taking negative bets, as Bitcoin was “likely to rise to near $120K after the correction.”
Read BTC’s Price Prediction 2024-25
Bitcoin’s liquid supply shrinks further
Despite high unrealized profits, most Bitcoins have been steadily moving out of exchanges. A marked divergence was observed between Bitcoin’s price movement and its supply on exchanges.
This signaled that investors were not in a hurry to sell, but rather accumulated for higher future gains.
Source: Santiment
