Bitcoin's Average Realized Profits Drops Drastically, Is The Market Euphoria Cooling Off?

Source: Bitcoinist

Over the last few days, Bitcoin has displayed remarkable price performances and resilience, surpassing its previous all-time high of $108,000, achieved last December. However, many investors continue to face a setback as BTC’s profitability decreases significantly.

Investors See Reduced Gains As Profitability Shrinks

In spite of a recent notable surge in prices, Bitcoin’s profitability has turned negative, reflecting a shift in market dynamics. The negative development was outlined by seasoned market expert and verified author Axel Adler Jr. in a post on the X (formerly Twitter) platform.

Data from Axel Adler reveals that Bitcoin’s average realized profit has fallen from $146 million to about $62 million, representing a more than 50% decline. The drop may imply that short-term traders are locking in lesser gains while long-term holders persistently exercise caution. Furthermore, a decline in average realized profit signals a cooling period for the flagship asset.

Average realized BTC profit drops by over 50% | Source: Axel Adler on X

Even though they are average, Adler claims these are still high levels, with absolute values being significantly higher. However, the market will begin to cool down at the current levels if the average figure drops below $40 million.

This sharp drop comes in light of upward momentum as BTC surged to new levels, raising questions about the sustainability of its uptrend. Nonetheless, crypto enthusiasts remain optimistic about BTC’s short-term and long-term prospects, asserting that the asset has not yet reached its peak for this cycle.

BTC’s Bull Market Still Intact

After navigating BTC’s price action, Mags, a market expert and trader has pinpointed a potential time frame for the asset to top out this market cycle. The expert offered his insights as speculation about Bitcoin reaching its market peak arises in the community.

Mags’ bold prediction is based on historical price trends leading to a market top after surpassing its previous all-time high in each cycle. Historically, the expert contends that BTC’s price reaches a market top between 230 and 330 days after a break above its previous peak.

As seen in the 2016-2017 and 2020-2021 cycles, following a breakthrough of its prior peaks, BTC topped out in 233 days and 328 days respectively. Meanwhile, in the ongoing 2024-2025 cycle, the flagship asset just exceeded its previous all-time high.

With BTC recently breaking above its former peak, the trend implies the asset will reach a market top in 2025. Specifically, Mags believes this would occur between July and October 2025, which brings BTC’s price to a market top at the $305,000 level.

Presently, Bitcoin’s run to a new all-time high has faced volatility, causing a drop to $102,700, with a nearly 3% decrease in the past day. Bullish sentiment is waning as its daily trading volume is down by more than 21%.