Key Points
- Long-term Bitcoin holders are slowing down on profit-taking after March’s all-time high.
- Upcoming Bitcoin halving and evolving regulations are significant market influencers.
After the all-time high in March, long-term holders of Bitcoin (BTC) began taking profits. However, this trend has started to diminish, according to a recent report by Glassnode.
Profit-Taking Trends and Market Euphoria
Glassnode’s report indicates that profit-taking usually increases during all-time high periods but has been decreasing in recent weeks. The balance of assets between long-term Bitcoin holders and new demand suggests the current market is in the early stages of a euphoria or price discovery phase. However, it’s worth noting that previous euphoria phases have experienced multiple price drawdowns exceeding 10%, with many even reaching 25% plus price corrections.
Only two price corrections of around 10% have occurred since the Bitcoin all-time high in March, the report further added.
Impact of Bitcoin Halving and Regulation
The forthcoming Bitcoin halving is a major subject of current market speculation. Sunny Lu, VeChain Founder, suggests that evolving regulatory impacts will shape Bitcoin’s path following the upcoming halving event.
Lu noted that regulatory actions have significantly influenced the pivotal price moments since the last halving in May 2020. He highlighted that the Bitcoin price hit multiple previous all-time highs following the last halving, with three significant price peaks happening after the Coinbase IPO in April 2021, the approval of Bitcoin futures ETFs in November of the same year, and the third in March of this year, driven by the approval of spot Bitcoin ETFs.
Lu emphasized that this was the first cycle with multiple all-time highs post-halving, triggered by regulatory progress in addition to the psychological impact the halving inherently has on the entire market.
The VeChain founder also noted a shift in focus from the traditional understanding of the halving’s impact, which is solely based on supply dynamics, to a broader consideration of macroeconomic factors. He stated, “It’s becoming less about the mathematics of the halving, which by nature causes an increase in prices due to a smaller supply, and more about the impact of macro forces.”
