Total Realized Bitcoin Profits Surpass $650 Billion, Already Exceeding the Previous Crypto Boom
In the ongoing bull run, Bitcoin has witnessed three significant profit-taking waves, according to on-chain analytics firm Glassnode. These spikes, which occurred around $106,800, mark a 1% increase over the last seven days, have been primarily driven by investors locking in gains following Bitcoin's all-time high (ATH) surges above $110,000.
The Realized Profit metric, which measures the total amount of profit BTC investors are realizing through their transactions using on-chain data, has shown three major spikes in the current bull cycle. This metric determines the cost basis of each token being sold or transacted by using the previous transfer price. If the last acquisition value for any token is less than the current spot price, the token's sale corresponds to profit realization.
The causes of these profit-taking spikes are multifaceted. They were triggered by Bitcoin's breakout above $110,000 and subsequent brief rallies, as investors capitalized on these price peaks to realize gains, causing large profit-taking volumes. Additionally, large Bitcoin holders, or "whales," owning over 10,000 BTC, have been selling off continuously since 2017, cashing out substantial profits during these high price periods. Furthermore, seasoned investors holding Bitcoin for over a year showed a sharp increase in realized profits in late May, coinciding with the price surges, contributing significantly to the profit spikes.
The implications of these profit-taking spikes are far-reaching. After these waves, Bitcoin experienced short-term pullbacks and consolidation phases, such as slipping below $105,500 after briefly trading above $106,000. This selling pressure tempers further rallies in the near term. Glassnode data shows less frequent but highly profitable trading days, with profit-taking happening on less than 8% of trading days, indicating a meaningful transition to locking in gains among investors rather than continuous accumulation.
Despite intense profit-taking, some veteran holders have reduced their selling considerably, suggesting confidence in further upside and a decision to hold through short-term fluctuations. Analysts like Willy Woo argue that while short-term profit-taking is significant, Bitcoin remains a strong long-term investment given its price history and institutional interest. The selloffs by "big whales" may pave the way for sustained growth over years.
In summary, the three major spikes in Bitcoin Realized Profit during the current bull run signal concentrated moments of profit-taking triggered by new ATH price levels and participation from large and veteran holders. These spikes cause short-term price pullbacks and reflect a transition towards crystallizing gains, but do not necessarily undermine the broader bullish trend or long-term investment thesis for Bitcoin.
[1] Glassnode Report on Bitcoin Realized Profit Trends [2] Willy Woo's Analysis on Bitcoin's Profit-Taking Waves [3] CoinTelegraph Article on Bitcoin's Profit-Taking Spikes and Implications
Investors have been actively realizing profits in the current bull run, as indicated by the spikes in the Realized Profit metric for Bitcoin. This trend, which has shown three major instances, occurs when investors sell or transact tokens at a price higher than their cost basis, measured using on-chain data.
The profit-taking spikes, which are triggered by Bitcoin's breakout above significant price levels and participation from large and veteran holders, cause short-term price pullbacks but do not necessarily undermine the broader bullish trend or long-term investment thesis for Bitcoin.
