Following a rally that saw Bitcoin nearly hit $82,500 earlier this week—the highest since January—it has since dropped to trading below $80,000. Over the past month, Bitcoin’s value surged by more than 17%, but analysts at CryptoQuant suggest it remains part of a ‘bear market rally.’ This could indicate impending increased selling as profit levels rise.
On May 4, Bitcoin holders realized profits amounting to 14.6K BTC, marking the highest daily profit since December 10. The asset’s 37% increase from its April lows brought many back into profitable territory, leading to significant profit realization—a phenomenon not seen since December 2021. Short-term holders have been securing these gains since mid-April.
Historically, spikes in realized profits at key resistance levels during bear markets often signal either local price peaks or extended consolidation phases, according to CryptoQuant. The firm reports that Bitcoin traders’ 30-day net realized profit has returned to positive territory, signifying more holders have experienced gains over losses recently—a ‘structural inflection point.’
Nevertheless, current profit-taking, at a net of 20,000 BTC, is still significantly below the levels seen during bull market transitions (130,000-200,000 BTC), reinforcing its classification as a bear market rally rather than a shift in market regime.
With unrealized profits reaching their highest since June 2021, CryptoQuant warns that this could increase correction risks as traders are incentivized to lock in gains. However, the firm notes that such corrections might unfold gradually, citing persistent demand for perpetual futures, subdued exchange inflows, and a less drastic decline in spot demand. Historically, these factors have supported short-term price strength during bear market rallies.
Bitcoin was trading at $80,150 recently, surpassing the $80,000 mark after dropping to $79,692 earlier Thursday. It remains over 36% below its all-time high of $126,080 from October. Other significant cryptocurrencies like Ethereum and XRP have also seen declines today, falling more than 2% each to trade at approximately $2,301 and $1.39 respectively. CoinGlass reports that more than $269 million in crypto longs were liquidated in the past 24 hours.
On Myriad, a prediction market by Decrypt’s parent company Dastan, users are optimistic about Bitcoin reaching $84,000 before dropping to $55,000, assigning an 83% likelihood as of this writing.