Bitcoin is up nearly 10% this month, but the rally is running into resistance near $75,000. The pause is notable as US stocks move to record highs.
On-chain data shows that holders are selling for strength, which helps explain the slowdown.
This is evident from an on-chain indicator called realized profit/loss, which tracks the total dollar value of gains or losses locked in by holders as they move their coins on-chain. The indicator compares the current price at which coins are moved to the price at which they were last moved (the assumed acquisition price) and effectively shows whether investors are selling at a profit or a loss.
Values above 1 indicate increased profit taking, and the 30-day exponential moving average (EMA) is currently well above this threshold. The EMA is used to smooth out daily noise and highlight the broader trend in realized profits.
“Profit-taking activity is increasing, with the 30D EMA for Realized Profit/Loss Ratio at 1.16, indicating that investors are selling for strength. A sustained move above $78.1K will require the market to absorb this overhead supply,” the firm said in a report.
Profit-taking was particularly strong on Tuesday, when Bitcoin briefly climbed towards $76,000 before quickly falling back below $75,000. According to CryptoQuant, investors realized about $1.14 billion in profits during the move, one of the biggest single-day readings this year.
The indicator, while widely tracked, has limitations, primarily because it assumes that coins moving on the chain are being sold. In reality, they can simply move between wallets or exchanges for custody, rebalancing or internal transfers.
That said, the latest profit-taking signal is in line with other indicators, such as the cumulative volume delta, suggesting that demand is concentrated in specific exchanges, while activity remains weaker elsewhere.
CVD is a measure of who is more aggressive in the market. It shows whether the market is driven to a greater extent by buyers who demand liquidity or by sellers bidding.
So far, buyers have been primarily aggressive on Binance, but not as much on Coinbase or other exchanges, according to Glassnode.
Vikram Subburaj, managing director of India-based FIU-listed exchange Giottus, echoed the view, saying sentiment is improving but conviction is still not fully established.
“Funding rates remain slightly negative, showing traders are still cautious and not yet leaning aggressively long. On-chain activity has slowed. This suggests the market is consolidating, not overheating,” he said.
Furthermore, bitcoin options trading on Deribit continues to show a put options bias across all timeframes. It indicates continued fear of downside and demand for protection offered by puts.
Overall, yield pressures, uneven spot demand and cautious derivatives positioning all indicate that buyers are absorbing supply but not yet overwhelming it.
