Bitcoin Demand Falls 483.88K BTC Amid Whale Profit-Taking

Bitcoin (BTC) metrics suggest caution amid rising price following a swift recovery. Following the April 28 spike, traders flagged incoming risk due to higher profit-taking from whales and miners. Short-term holders are mostly at risk of sparking a reaction, especially from retail investors who are also in the mix.

According to CryptoQuant researchers, the short-term momentum for Bitcoin demand remains in the red zone. Onchain data shows the 30-day demand falling to previous levels, gradually ushering in low sentiments. Similarly, the 30-day Simple Moving Average (SMA) plunged further compared to a bull cycle level. While demand stands at -483.88K BTC, SMA fell to -310.70K BTC. This metric highlights the shift in active demand from long-term holding, showing the difference between speculative distribution and accumulation. Bitcoin traders have expressed concern, citing previous bear markets.

In the 2021-2022 cycle, plunging short-term demand preceded major macro pullbacks. This is also seen in periods laced with multiple flash dips. Last month, Bitcoin entered into a correction phase due to the United States tariffs. A look at the charts shows the pullback in short-term trades before subsequent whale absorption. The sustained negative momentum reflects declining demand pressure from short-term participants, possibly driven by profit-taking or market uncertainty. Long-term holders continue to absorb less BTC than what’s being distributed by short-term holders, a dynamic typically seen in late-cycle distribution phases or during macro consolidation. Despite the price holding above $94.4K, the underlying demand engine is cooling off.

Profit-taking tops the reasons for the increased sell pressure over the last two weeks. The Bitcoin price reclaimed $ 95,000 after weeks in the doldrums as macro sentiment flipped green. This led to huge outflows and inflows to centralized exchanges. In the last 24 hours, miners’ reserves dropped by 943 BTC, approximately $850 million.

The short-term demand triggered caution among traders, but the majority of actors are bullish. Whale inflows continued to drive the market as bulls set sights on multi-month peaks. Last week, over 60 new wallets holding more than 1000 BTC emerged, signalling new inflows. Whale activity spiked trader confidence as new retail investors began circling the asset class. Institutional products notched a massive $3.4 billion in inflows in seven days, the third-largest weekly gains. Likewise, altcoins posted double-digit gains on speculation about new spot ETFs in the United States and an altcoin season if the pressure gains steam.

A prominent crypto analyst has recently highlighted a bearish metric for Bitcoin, indicating a surge in profit-taking activities. This development comes as the cryptocurrency market experiences significant volatility, with Bitcoin's price fluctuating around $94,000. The analyst's observations suggest that a growing number of investors are cashing out their holdings, potentially signaling a shift in market sentiment.

The bearish metric, which tracks Bitcoin's share of the total crypto market cap, reveals a clear and growing trend of capital moving away from BTC. This shift is particularly notable as Bitcoin has traditionally been the dominant player in the cryptocurrency space. The analyst's findings indicate that the recent rally in Bitcoin's price has led to heavy profit-taking, with investors locking in gains and reducing their exposure to the volatile asset.

The surge in profit-taking activities can be attributed to several factors. Firstly, the recent halving event, which occurred in April 2024, has reduced the rewards for miners, making it less lucrative to mine new Bitcoins. This scarcity could drive up the price in the long term, but in the short term, it has led to increased selling pressure as miners look to offload their holdings. Secondly, the Federal Reserve's interest rate cuts in 2024 have attracted more investors to riskier assets, but the recent surge in profit-taking suggests that some investors are now taking a more cautious approach.

The analyst's bearish outlook is further supported by the fact that Bitcoin's price remains indirectly tethered to interest rates. If inflation continues to rise, the Federal Reserve may be forced to raise interest rates again, which could lead to a further decline in Bitcoin's price. Additionally, the analyst notes that Bitcoin's market cap would need to reach nearly $30 trillion for it to hit the $1.5 million price target predicted by some analysts. This seems ambitious, given the current market conditions and the volatility of the cryptocurrency space.

Despite the bearish metric, some analysts remain optimistic about Bitcoin's long-term prospects. Ark Invest founder Cathie Wood has predicted that Bitcoin's price could reach $1.5 million by 2030, driven by institutional interest and rising demand from emerging markets. However, the recent surge in profit-taking activities suggests that investors are taking a more cautious approach, and the road to such lofty targets is full of risks.

In conclusion, the bearish metric highlighted by the crypto analyst indicates a growing trend of profit-taking activities in the Bitcoin market. While some analysts remain optimistic about Bitcoin's long-term prospects, the recent surge in selling pressure suggests that investors are taking a more cautious approach. The future of Bitcoin remains uncertain, and investors should be prepared for continued volatility in the cryptocurrency space.