Near-term Bitcoin price dips probably won’t be as deep as last week’s 10% plunge, as selling pressure has significantly eased since its first spike above six figures, according to one crypto analysis. Others remain skeptical.
“With such a decline in realized profit and sell-side pressure, we can expect future declines to be less abrupt than the one experienced last week,” Bitfinex analysts said in a Dec. 9 markets report.
Signals of “easing sell-side pressure” emerges
On Dec. 6, over 24 hours, Bitcoin (BTC) dropped almost 10% from $103,493 to under $93,000, just one day after surpassing the $100,000 price level for the first time on Dec. 5, according to CoinMarketCap data.
Bitcoin is up 0.34% over the past seven days. Source: CoinMarketCap
Cointelegraph reported that the sudden price decline from $98,338 to $92,957 triggered over $303.5 million in liquidations of long positions within the hour, pushing total liquidations over the 24 hours to $404 million.
Still, Bitfinex analysts said signs of “market stabilization are emerging.”
“Realized Profit RP, which tracks the USD gains from moved coins, peaked at $10.5 billion daily during Bitcoin's surge towards $100,000. However, it has since fallen to around $2.5 billion per day, reflecting a 76 percent drop.”
They explained this suggests that profit-taking has “significantly cooled” and that further sell-offs may be “less dramatic in nature.”
At the time of publication, Bitcoin was trading at $97,483, according to CoinMarketCap.
The Bitfinex analysts also said that Bitcoin’s funding rates are “stabilizing” and that the market is transitioning to a “more balanced phase, where volatility is likely to be more contained and price movements less erratic in the medium term.”
Funding APR Heatmap. Source: CoinGlass
The current funding rate for Bitcoin on the world’s largest crypto exchange, Binance, is 0.01%, according to CoinGlass data.
Still, Glassnode lead analyst James Check remains uncertain about the market stabilizing.
“Sell-side pressure by existing holders is tremendous right now, and in my view, completely overwhelms the demand from both ETFs and MSTR,” Check said in a Dec. 9 X post.
“There are lots of heated signals,” Check added.
Long-term holders have been in significant profits
The Long Term Holder realized price — the average price paid by long-term Bitcoin holders — is $24,481, representing about a 400% average gain for long-term holders.
Related: Bitcoin ‘spinning top’ candle targets $115K after recent 15% BTC flash crash
Cointelegraph recently reported that Bitcoin’s climb toward $100,000 has seen significant offloads from long-term holders. Some analysts say this may signal a potential top that could catch traders offside when buy-side demand starts to wane.
“It’s a game of musical chairs: enjoy the ride, but be prepared when the music stops,” CryptoQuant contributor Maartuun said on Dec. 8.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.