It has just been confirmed that BTC has experienced the most extensive profit-taking activity since the last quarter of 2020. This information was obtained from data released by Santiment, an on-chain data analytics company. The released data also states that the profit-to-loss volume of the day-to-day ratio on on-chain transactions was one of the major metrics used to measure profit-taking volume in BTC trades.
Santiment explained that using such indicators helps explain the extent of profit-taking activities and the extent of profits that BTC traders harvest at every transaction. In further analysis, they disclosed that the indicators respond with a positive value when the profit volume is higher. If not, the reserve is usually the case.
The indicators used to come to this conclusion work by scanning each history of the on-chain coin. Santiment’s published information explains that the method of operation of this metric rates the price of BTC. The former selling price of any coin is always less than the present price of Bitcoin. With this development, when the coin moves at a particular profit, its transaction is added to the record of the profit volume. If the latest price goes beyond the present value, it is said that the sales of the coin are behind the loss of its volume.
The Ratio of The BTC Profit And Loss Volume
According to indicators gathered during this report, there was a strong surge in the price of BTC, which saw it rise above the $27,000 threshold. Unfortunately, this progress was short-lived, and it sank below its original benchmark. Reports indicate that the metrics scored around 1.4 in value during this activity, which means that the actual amount of the coin’s profit-taking deals is estimated at 2.4 times the loss-taking transactions. The signal level has been experiencing an all-time high since the last quarter of 2020, but things became bullish almost at the start of 2021.
As it stands, investors are said to be nursing an intense phobia of losing profit at this time, which is one of the reasons why investors rushed to withdraw their profits the moment the price climbed to $27,000. This rush by profit takers is also the reason why the price of BTC dropped to $26,000. Profit-taking activity also increased exponentially among Ethereum investors.
These activities took a few days before becoming visible among cryptocurrency industry spectators. Despite all these, experts have claimed that cryptocurrency has experienced one of the biggest value indicators since the beginning of 2023.
Bitcoin Prices And The Silicon Valley Bank Influence
The recent news about the collapse of major cryptocurrency banks in the United States has had a significant impact on the market. The behavior of the market has been adversely affected, and this has led to a sharp decline in the prices of major coins, particularly BTC. This decline has been evident over the past few days, and it has caused a great deal of concern among investors.
It has been reported that many investors are becoming increasingly paranoid about the possibility of other financial institutions, like Credit Suisse, suffering a similar fate as the recently collapsed Signature Bank and Silicone Valley Bank. This fear has been a major contributor to the current situation, and it has resulted in massive profit-taking activities. As a result, the prices of major coins have dropped to an all-time low.
Analysts have pointed out that the recent market behavior is not unexpected given the current state of affairs. They have also suggested that there may be a possibility of a rebound in the market in the near future. However, this is subject to several factors, including the willingness of investors to hold on to their coins despite the current situation.
It is worth noting that, despite the current situation, Bitcoin still has a significant market capitalization of $520.999 billion. The trading volume in the last 24 hours has been reported to be $40.224 billion, while the total amount in circulation stands at 19.321 million units.