Bitcoin's Price Range Bound by 220% Profit Taking at $110,000

Bitcoin's price has been experiencing a period of range-bound trading, with data indicating that this behavior is driven by profit-taking activities. The price has been fluctuating between $100,000 and $110,000, suggesting that investors are taking profits at these levels. This profit-taking is a significant factor in the current market dynamics, as it prevents the price from breaking out of this range.

New research from an onchain analytics platform indicates that Bitcoin must hit $140,000 before long-term holders (LTHs) enjoy the kind of profits seen earlier in the bull market. The $140,000 mark is a key price point for Bitcoin’s LTHs, who have contributed the lion’s share of selling pressure in recent weeks. Comparing current realized profits to earlier bull-market peaks shows that LTHs are not as deep “in the black” as before in 2024. To match those levels, BTC/USD needs to reach $140,000.

The average realized profit, based on the Market Value to Realized Value (MVRV) metric, currently stands at around 220%. However, in March and December 2024, average realized profits among LTHs were around 300% and 350%, respectively. The aggregate cost basis for LTHs is now approximately $33,800. To return to those profit levels, BTC would need to reach $140,000, a price level that many are calling for.

Market participants remain confident that the market can absorb selling pressure in what has become a new BTC price consolidation phase. Bitcoin is in the process of breaking out of a multi-week downtrend that had been ongoing since mid-May. This week, it was predicted that the bull market may have just several months left before a blow-off top and trend change arrive.

If Bitcoin manages to break above the current resistance levels, there is potential for the price to surge to $140,000. This breakout could open the path to even higher levels, potentially reaching $200,000. However, the risk of profit-taking hitting hard remains a concern. If investors continue to take profits at key levels, it could limit the upward momentum and keep the price within the current range.

The $140,000 price point is seen as a critical level for Bitcoin. If the price can sustain above this level, it would indicate strong bullish sentiment and could attract more investors to the market. However, if profit-taking intensifies, it could lead to a correction and a return to lower price levels.

The current market conditions are characterized by a balance between bullish and bearish forces. On one hand, the potential for a breakout to $140,000 and beyond is enticing for investors. On the other hand, the risk of profit-taking and a subsequent correction is a real concern. Investors will need to carefully monitor the market dynamics and be prepared to adjust their strategies accordingly.