Key Points
- Bitcoin HODLing levels have increased as investors anticipate higher prices, with over $7 billion in unrealized profits.
- Bitcoin exchange flows have reached their lowest levels this year, indicating potential volatility resurgence.
Bitcoin investors are eagerly awaiting for the cryptocurrency to hit the $70,000 mark, as evidenced by the significant amount of unrealized profits. This indicates that Bitcoin holders are choosing to HODL, expecting higher prices.
CryptoQuant analysis shows that Bitcoin currently has over $7 billion worth of unrealized profits. This points to the extent of HODLing and the anticipation of higher prices. However, this also highlights the potential for a significant retracement if profit-taking resumes.
Potential Outcomes of Profit Taking
If Bitcoin holders begin taking profits, the sell pressure could lead to a situation similar to the end of July when the price dropped dramatically within a few days. Currently, optimism is allowing Bitcoin to maintain its gains. As of now, Bitcoin is trading at $68,350, less than 2.4% away from hitting $70,000. The cryptocurrency is also nearing the next resistance range between $69,400 and $71,500.
Bitcoin Exchange Flows
Bitcoin exchange flows can provide insight into the latest bullish wave of the cryptocurrency. There was a surge in both exchange inflows and outflows between 13 and 16 October. However, exchange flows have since decreased to the lowest levels of this year.
Data shows that 3,760 BTC moved out of exchanges in the last 24 hours, with approximately 3,940 BTC moving into exchanges. This means exchange inflows were slightly higher than outflows.
Changes in exchange flow suggest that Bitcoin may be ready for a resurgence in volatility. However, whether this will be bullish or bearish is yet to be seen. Address flows may provide some insight.
The number of active sending addresses has been decreasing since mid-October, while the number of receiving addresses has been increasing. This suggests a shift in selling pressure despite the recent price increase. While this could mean that Bitcoin prices may rise further, a surprise wave of sell pressure is still a possibility.
