Bitcoin Investors Cashing Out $1B Daily Profit Raises Concerns

Bitcoin investors are cashing out profits at $1 billion daily, raising concerns about a potential market reversal. Research from CryptoQuant indicates this could signal a ‘local top or sharp correction’. Despite institutional changes, the core investor psychology remains unchanged, suggesting volatility ahead.

Bitcoin has seen an impressive surge in realised profits, averaging around $1 billion per day as investors take advantage of some of the highest price levels in months. However, this massive profit-taking raises eyebrows, with concerns the recent market rally might soon stall or experience a reversal. According to research presented by CryptoQuant, without a shift in sentiment from institutional players, Bitcoin (BTC) could be facing a potential ‘local top or sharp correction’ due to this aggressive profit-taking trend.

In a post dated May 8, CryptoQuant highlighted the significant uptick in realised profits among Bitcoin investors. The surge coincided with BTC/USD nearing the $98,000 mark, reminiscent of late 2024 when the cryptocurrency smashed through previous all-time highs, eventually hitting $100,000. Contributor Kripto Mevsimi noted that while the profit-taking behaviour seen now is not as extreme as the November-December 2024 phase, it still reflects a pattern typical of late-stage bull markets.

According to their data, the current seven-day moving average of realised profits across holders stands at roughly $1 billion daily. Citing historical trends, CryptoQuant warns that such phases frequently precede either a local top or sharp corrections, particularly when profit-taking remains elevated and persistent. This points to potential volatility on the horizon for Bitcoin investors.

While some market analysts have suggested that the Bitcoin landscape has undergone a fundamental shift with increased institutional participation, the underlying investment reactions appear unchanged, according to Kripto Mevsimi. Some of the most notable newcomers include US spot Bitcoin exchange-traded funds (ETFs), particularly BlackRock’s iShares Bitcoin Trust, which has experienced consistent net inflows for over two weeks.

Yet, despite these institutional advancements, Kripto Mevsimi believes that the core investor psychology hasn’t shifted significantly. He stated that while the structure of the market has evolved since the launch of spot ETFs in January 2024, investors’ responses to Bitcoin’s price changes remain consistent.

As always, it’s advisable to approach investment decisions with caution. This article does not offer investment advice or endorsements. It’s essential for readers to conduct thorough research before making any financial moves.