- Bitcoin momentum is fading as profit-taking increases, indicated by a decline in Momentum Buyers and an increase in Profit Takers
- The cryptocurrency’s price may be heading towards a sideways movement due to rising profit-taking and declining momentum.
- According to Glassnode, investors are now selling more than they are buying, which is causing uncertainty about where Bitcoin’s price will move in the near future.
Sharing some insight into the current market, crypto analysts at Glassnode are giving a hint to investors about the future of Bitcoin (BTC). On May 28, there was a clear sign of shifting investor behavior, according to their data.
Many Are Selling Bitcoin More Than Buying as Its Price Starts to Slip
Relative Strength Index (RSI) shows a decrease in Momentum Buyers to an RSI of around -20. Fewer investors seem to be buying the leading cryptocurrency, and this suggests less enthusiasm for pushing its value upward.
Also, the RSI for Profit Takers jumped to close to -77, which reflects many traders choosing to sell their profits. Such a pattern can indicate an upcoming drop in BTC price.
Graphs in this chart make the trend easy to see. It measures BTC’s price together with the amount of coins held by investor groups over time.
Peaking in late May, the price then went down a bit as investors sold some of their holdings. According to this pattern, investors are actually stepping back which may be a sign that growth might slow down in the short run.
Glassnode’s analysis points to this behavior as a common sign of market tops, where enthusiasm wanes, and selling picks up.
Source: X (@glassnode)
Profit-Taking Could Cause Consolidation
In a follow-up post, Glassnode added another layer to the story. Despite the profit-taking, First-Time Buyers remain active, with their 30-day RSI exceeding 90. This level points to rising demand for Bitcoin which might help maintain the rise in its price.
Still, there is one drawback. If the new demand disappears, momentum will slow as more profit-taking happens which might result in the market stabilizing rather than continuing to rise.
In the second chart, some groups of investors have rotated their holdings over the past six months, based on Bitcoin’s cumulative supply. The coin’s price is rising because of active buying, but the red and yellow patches hints that people are also selling.
Source: X (@glassnode)
