Bitcoin ($BTC) is likely entering a crucial profit-taking phase. This development indicates a bearish shift in the crypto market sentiment. As per CryptoQuant CEO, Ki Young Ju, the market displays a transition into a bearish period. Thus, the recent price rally of Bitcoin ($BTC) could be coming closer to exhaustion.
Bitcoin’s PnL Index 365-Day MA Underscores Shift toward Profit-Taking Zone
The latest on-chain statistics reveal that Bitcoin’s ($BTC) entrance into the profit-taking zone gets backing from the PnL Index Signal’s 365-day moving average. This displays correlation between Bitcoin’s 365-day moving average and price. Historically, the PnL Index’s peak levels have paved the way for or paralleled key price surges. However, the troughs have reportedly aligned with bottoms in the market performance. Hence, the current uptick highlights that several $BTC holders are presently in profit, raising the potential of selling pressure.
Additionally, the cyclical momentum is consistent with former market peaks in 2021, 2017, and 2013. In these phases, profit-taking led to extended bearish trends. Keeping this in view, unless any improvement in wider liquidity conditions, just like stimulus-led environment seen in 2020, there is a possibility for the market to struggle for the sustenance of bullish momentum. Therefore, it clearly implies that the leading cryptocurrency could go through downward pressure without liquidity injection from outside.
CryptoQuant CEO Anticipates Prolonged Bear Market in Near Term
According to Ki Young Ju, Bitcoin’s ($BTC) ongoing shift toward profit-taking territory raises the speculation of bearish trend in the near term. At the same time, while the PnL Index is reaching peaks, the market may be nearing a crucial inflection point. Overall, whether the current outlook pushes Bitcoin ($BTC) into a deep bear market is yet to be witnessed.
