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bitcoin set a new all-time high yesterday, reaching $93,483, continuing its impressive rally without any significant setbacks. Over the past nine days, the crypto leader has risen with minimal declines, not falling more than 5% during this bullish phase. This relentless price action has attracted widespread attention as bitcoin defies expectations and resists any notable pullback.
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Key data from CryptoQuant reveals that traders' unrealized profit margins are increasing, indicating that the market may be approaching a near-term peak. High levels of unrealized profits usually indicate that a correction could be on the horizon as investors look to lock in profits. However, given the current strength of bitcoin price action, the timing and scale of any correction remains uncertain.
With bitcoin price momentum showing little sign of slowing, the next few days will be crucial in determining whether the market can sustain these levels or if a healthy pullback is on the horizon. Investors are closely watching potential entry points and key support levels, knowing that even minor dips could generate strong buying interest as bitcoin's bull phase persists.
Is bitcoin's Strong Move About to Pause?
bitcoin's price action has been notable, rising 38% since the US election and capturing widespread attention with its relentless bullish momentum. However, this aggressive rally may be approaching a temporary pause as the data hints at a possible correction.
CryptoQuant's head of research, Julio Moreno, <a target="_blank" href="https://x.com/jjcmoreno/status/1856891952865685540″ target=”_blank” rel=”nofollow”>recently shared a compelling graph highlighting bitcoin traders' unrealized profit margins, which have reached 47%, a level that has often preceded price pullbacks.
High unrealized profit margins may indicate that traders are banking on significant profits, increasing the likelihood of profit taking that could trigger a market cooldown. Moreno's analysis points out that this metric tends to correlate with a greater risk of correction when it exceeds certain thresholds. For example, previous peaks in March reached 69%, while in December 2023 unrealized gains reached 48%, cases that led to notable corrections soon after.
Still, the current level of 47% suggests that while caution may be warranted, bitcoin's bull phase still has room to continue. Past cycles demonstrate that the market has tolerated even larger unrealized gains before reversing. The data implies that while a pullback may be on the horizon, bitcoin could continue its upward trend for a bit longer before a significant cooldown occurs.
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In the coming days, investors will be attentive to any signs of a consolidation phase or a possible pullback. If bitcoin maintains strong support levels, the continuation of this bull run remains plausible. However, if profit-taking intensifies, a correction could provide a healthy reset for bitcoin to gain momentum for future gains.
btc surpassing ATH almost every day
bitcoin has surpassed its all-time high seven times in the last eight days, fueling very bullish sentiment across the market. Currently trading at $90,620 after reaching a high of $93,483, bitcoin price action remains strong, indicating sustained buying momentum. This rise has set a remarkably optimistic tone, but a brief period of correction could provide a needed reset after such a prolonged bullish momentum.
Given the high buying pressure, a short-term pullback to establish a new market equilibrium would be a healthy development. This could allow bitcoin to test lower demand levels and establish stronger support areas for its next bullish leg. If profit-taking intensifies in the near term, btc could reach the $85,000 mark again as it looks to stabilize.
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In the coming days, investors will likely keep an eye on this potential consolidation phase to gauge bitcoin's resistance. A successful retest of support around $85,000 would reaffirm confidence in the current bull market, providing a stronger foundation for bitcoin to advance towards even higher levels. Overall, while the trend remains bullish, a balanced correction may be just what the market needs to maintain its long-term momentum.
Featured image of Dall-E, TradingView chart
