Bitcoin has climbed nearly 10% this month, but the rally faces resistance near $75,000. The pause is notable as U.S. stocks hit record highs.
On-chain data shows that holders are selling in force, which helps explain the slowdown.
This is evident from an on-chain indicator called realized profit/loss, which tracks the total dollar value of gains or losses locked in by holders as they move their coins on-chain. The indicator compares the current price at which coins are moving with the price at which they were last moved (the assumed acquisition cost), thereby indicating whether investors are selling at a profit or at a loss.
Values above 1 indicate increased profit-taking, and the 30-day exponential moving average (EMA) is currently well above this threshold. The EMA is used to cut through the day-to-day noise and highlight the broader trend in profits being made.
“Profit-taking activity is on the rise, with the 30D EMA of the realized profit/loss ratio at 1.16, indicating that investors are selling in force. A sustained move above $78.1k will require the market to absorb this overhead supply,” the firm said in a report.
Profit-taking was particularly strong on Tuesday as Bitcoin briefly climbed as high as $76,000 before quickly falling back below $75,000. According to CryptoQuant, investors made approximately $1.14 billion in profits during this operation, one of the largest single-day figures this year.
The indicator, while widely followed, has limitations, primarily because it assumes that coins circulating on-chain are sold. In reality, they may simply move between wallets or exchanges for custody, rebalancing, or internal transfers.
That said, the latest profit-taking signal aligns with other indicators, such as cumulative volume delta, suggesting that demand is concentrated on specific exchanges while activity remains lower elsewhere.
The CVD helps determine who is the most aggressive in the market. It shows whether the market is driven more by buyers demanding liquidity or by sellers responding to their offers.
So far, buyers have been aggressive primarily on Binance, but not so much on Coinbase or other exchanges, according to Glassnode.
Vikram Subburaj, CEO of Giottus, the FIU-registered exchange based in India, echoed this view, saying sentiment is improving, but conviction is not yet fully established.
“Funding rates remain slightly negative, showing traders are still cautious and not yet moving aggressively towards buying. On-chain activity has slowed. This suggests the market is consolidating and not overheating,” he said.
Additionally, Bitcoin options trading on Deribit continues to show a bias towards puts across all time frames. This indicates continued bearish fears and demand for the protection offered by put options.
Overall, profit-taking pressure, uneven spot demand and cautious derivatives positioning indicate that buyers are absorbing the supply but not yet overwhelming it.
