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
Despite a recent notable surge in prices, Bitcoin’s profitability has turned negative, reflecting a shift in market dynamics. This concerning trend was outlined by seasoned market expert and verified author Axel Adler Jr. in a post on the X (formerly Twitter) platform.
According to data shared by Axel Adler, Bitcoin’s average realized profit has plummeted from $146 million to approximately $62 million, marking a staggering decline of over 50%. This drop suggests that short-term traders are locking in smaller gains while long-term holders are exercising increasing caution. Furthermore, the decline in average realized profit may indicate a cooling period for the flagship asset.
Although these figures are alarming, Adler notes that they remain relatively high in absolute terms. However, he warns that a further decline below $40 million in average realized profit could signal a significant cooling of the market.
This sharp drop in profitability coincides with Bitcoin’s upward momentum, prompting critical questions regarding the sustainability of its recent price action. Nevertheless, crypto enthusiasts maintain their optimism regarding BTC’s short-term and long-term prospects, with many asserting that the asset has yet to reach its peak for this market cycle.
BTC’s Bull Market Still Intact
After analyzing BTC’s price actions, market expert and trader Mags highlighted a potential timeframe for the asset to achieve its market peak. His insights come amidst growing speculation within the community about Bitcoin potentially reaching a market top.
Mags’ projections are grounded in historical trends, suggesting that BTC typically reaches its market top between 230 and 330 days after crossing above its previous all-time high. This pattern is evident from past cycles; in both the 2016-2017 and 2020-2021 trends, Bitcoin peaked at 233 days and 328 days, respectively, following its breakout.
Currently, in the ongoing 2024-2025 cycle, Bitcoin has just surpassed its previous all-time high, suggesting the potential for a price peak in 2025. Specifically, Mags anticipates this peak to occur between July and October 2025, targeting a price level around $305,000.
Currently, Bitcoin’s journey toward reaching a new all-time high has experienced volatility, dipping to $102,700, with nearly a 3% decrease over the past day. Additionally, bullish sentiment appears to be waning, highlighted by a more than 21% drop in its daily trading volume.
Featured image from Unsplash, chart from Tradingview.com
