The recent price sell-off is considered to be a needed correction to wipe out the traders’ unrealized profits. In general, such sell-offs should be taken as a bottom signal in a bull market that can bring a trend reversal. After this sell-off, the traders’ unrealized profits have fallen dramatically, according to CryptoQuant data. Bitcoin is currently trading at $64,611, with the market likely to drop further in the following days.
Traders’ Unrealized Bitcoin ($BTC) Profits Hit Lowest Level Since February
In particular, these profits are now at their lowest level since the beginning of February and currently make up only 10% of traders’ portfolios. The recent price movements also brought cryptocurrency prices closer to the traders’ realized price of $58,000.
In this regard, the current prices in the market are more aligned with the prices at which traders have bought and sold [ccpw id=60415]. The convergence between current and realized price is a potential sign that market valuations are returning to normal.
Bullish Sentiment Persists Despite Market Sell-Off
However, despite the recent market sell-off, investor sentiment is still bullish. While the event likely caused trader losses in the short term, it also created a perfect opportunity for long-term investors to enter the market at significantly better and cheaper prices.
Overall, this sell-off is attributed to a market correction and consolidation, which is a natural market cycle. Therefore, investors should still be cautious and monitor the market closely.
