Bitcoin’s profit-taking activity has significantly cooled, dropping 76% after its price briefly surpassed $100,000 on Dec. 5. The cryptocurrency faced a sharp 10% drop the following day, falling from $103,493 to under $93,000. This price dip caused over $303.5 million in liquidations, with total daily liquidations reaching $404 million. Analysts now suggest that future price drops may be less abrupt as sell-side pressure eases.

Reduced Profit-Taking Indicates Market Stabilization

Bitcoin’s realized profit, which measures USD gains from moved coins, has fallen from a peak of $10.5 billion daily during its rally to about $2.5 billion. This 76% decline signals a slowdown in profit-taking, suggesting that the market may be entering a more balanced phase.

Bitfinex analysts believe this reduced profit-taking activity reflects lower sell-side pressure, which could limit the severity of future price drops. Additionally, Bitcoin’s funding rates have stabilized, further supporting the idea that the market may experience less erratic price movements in the medium term.

Long-Term Holders Remain a Key Factor

Despite these stabilizing trends, some analysts remain cautious. James Check from Glassnode highlighted that current sell-side pressure from Bitcoin holders still outweighs institutional demand from entities like ETFs and MicroStrategy.

Long-term holders, whose average purchase price is $24,481, are enjoying an average gain of 400%. However, their recent selling activity has raised concerns among analysts, with some warning that Bitcoin could be nearing its peak.

This article does not contain investment, financial, legal, accounting or tax advice or recommendations. All investment and trading activities carry risk, including the potential loss of funds. Therefore, you should conduct your own research when making a decision