Bitcoin Whales Cash Out $500M Hourly as Profit-Taking Accelerates

Per Glassnode data, “Entity-adjusted realized profit spiked above $500M/hour three times in the past 24 hours, signaling intense profit-taking activity.”

Psychological Resistance at Key Price Levels

The entity-adjusted realized profit usually refers to the actual realized profit or earnings of an entity, adjusted for factors that affect the entity’s financials, such as tax adjustments, accounting estimates, and the sale of an asset. 

As a result, investors and analysts use it to understand sustainable earnings, make forecasts, and compare performance across periods or with peers.

Therefore, the above Bitcoin chart shows that profit-taking activity has steadily increased since the second half of May, frequently surpassing the $500 million mark. 

Given that Bitcoin is witnessing the most intense period of profit-taking by whales since early February, the apex cryptocurrency’s recent trend of touching various psychological prices of $100,000, $105,000, and $110,000 might have triggered this development. 

Notably, this phenomenon usually leads to increased selling pressure as traders anticipate potential price corrections.

Market analyst Willy Woo recently cemented the fact that BTC whales were on a selling spree.

He noted that over the past eight years, whale entities holding between 10,000 and 100,000 Bitcoin have steadily reduced their supply.

This is because their total holdings have dropped by approximately 40%, declining from 2.7 million BTC to about 1.6 million BTC.

Source: Willy Woo

Bitcoin's All-Time High Sparks Profit-Taking Frenzy

Bitcoin's recent surge to an all-time high has been met with a wave of profit-taking, leading to a notable pullback in its price. 

After reaching a peak of $112,00 on May 22, Bitcoin has experienced a decline, trading at $104,548 as of June 5, marking a 7% drop from its peak.

At the time, Bitcoin’s new ATH made the leading cryptocurrency to surpass Amazon in terms of market capitalization. 

Nevertheless, analysts attribute this downturn primarily to investors capitalizing on gains from the recent rally

On-chain metrics also reveal increased volumes to exchanges from short-term holders in profit, suggesting that these investors are actively taking profits.

Despite the pullback, the broader market sentiment remains cautiously optimistic. 

Institutional demand continues to provide support, and some analysts believe that the current correction is a healthy consolidation after a significant rally. 

However, the market may experience further volatility if selling pressure persists without sufficient demand to absorb it.

Therefore, Bitcoin's recent all-time high has triggered profit-taking among investors, leading to a price correction. 

While this is a common occurrence in bullish markets, the sustainability of Bitcoin's upward trajectory will depend on the market's ability to absorb selling pressure and maintain demand.

Bitcoin Has Not Thrown in the Towel Yet

Given that Bitcoin ETFs have ended a 3-day outflow streak, institutional investors have ignited the fire after pumping in $375 million.

This uptick in Bitcoin ETF inflows signifies growing investor interest and confidence among asset managers, pension funds, and hedge funds. 

Notably, consistent inflows into Bitcoin ETFs reflect bullish market sentiment and a growing acceptance of Bitcoin as a legitimate asset class. This trend indicates that investors view Bitcoin as a viable investment, potentially as a hedge against economic uncertainties.

On the other hand, a supply shock is brewing in the Bitcoin ecosystem with a recent Sygnum report showing that BTC supply is at an 18-month low. 

Sygnum analysts recently stipulated that more than 1 million BTC have departed crypto exchanges since the end of 2023.

Why is this bullish? Well, as more BTC exit exchanges, selling pressure decreases whereas scarcity increases.

Conclusion

Even though whales are accelerating profit-taking in the Bitcoin network, various on-chain metrics, such as an increase in BTC ETF inflows, show that its still game on for the top cryptocurrency. 

Therefore, time will tell how Bitcoin plays out in the short and long term.