Bitcoin has recorded realized gains of $5.64 billion and is facing selling pressure due to bearish institutional sentiment.
Bitcoin had a tough day on Wednesday, opening above $62,000 before falling to a low of $60,300 as of this writing. This marked a 2.33% price decline within 24 hours, adding to the negative overall weekly performance, confirming t.The world's largest cryptocurrency remains in a bearish trend.
Meanwhile, recent data shows that a significant portion of investors are leveraging their holdings, leading to billions of dollars in realized profits.
Billions in realized profits
Recent insights from on-chain data, share Expert Ali Martinez revealed that $5.64 billion in Bitcoin realized profits were recorded in the past 24 hours. This profit-taking behavior typically leads to selling pressure, which can lead to lower prices or short-term consolidation.
In particular, whenever there is a large spike in realized profits, the price of Bitcoin tends to either stabilize or fall, as shown in Martinez's chart. This relationship between profit taking and market adjustments has been observed repeatedly.
Additionally, Bitcoin trading volume decreased by 17% during the same period. This decrease in trading volume suggests less activity compared to the previous day.
weak organizational psychology
Another important indicator of sustained selling pressure on the largest cryptocurrencies is Coinbase Premium Index. The index tracks the price difference between Coinbase's Bitcoin, which is primarily used by US institutions, and Binance, which is popular among global retail traders.
Negative numbers in the Coinbase Premium Index suggest strong selling pressure from US financial institutions. According to CryptoQuant data, Coinbase premium fell to -41, indicating a significant decline by US institutional investors.
For context, the U.S. Supreme Court recently approved the sale of $4.38 billion in Bitcoin from Silk Road held by the U.S. government.
Coinbase premium falls to -$41, indicating strong selling pressure from US institutions 😬 pic.twitter.com/mjKcfIaJ0s
— Maartun (@JA_Maartun) October 8, 2024
Throughout October, the Coinbase Premium Index remained consistently in negative territory, indicating a preference for selling Bitcoin on Coinbase over other platforms. Historically, negative readings of this index have been preceded by further price declines for Bitcoin.
Upside forecast despite bearish sentiment
Despite the prevailing bearish sentiment, analysts still see Bitcoin's long-term potential. Technical analysis shows that Bitcoin has outperformed traditional assets such as gold.
Veteran chart expert Peter Brandt highlighted that the BTC/GLD ratio, which measures the value of Bitcoin against gold, is trending upward. This ratio suggests that Bitcoin has consistently outperformed gold in recent years.
Brandt points out that Bitcoin could break through the key resistance level of the BTC/GLD ratio. A breakout of 32 ounces of gold could signal a significant rally for Bitcoin, with predictions that it could rise to more than 100 ounces per Bitcoin.
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