Bitcoin’s 15% correction is profit-driven but bull cycle is over: CryptoQuant

Bitcoin (BTC) has entered a price correction period after rising above $73,700. Miners, whales and other market participants, including large investors, started selling their BTC to make a profit.

However, CryptoQuant analysts believe that Bitcoin's bull cycle is far from over as valuation metrics are shy of the levels seen at previous market highs.

BTC in debugging mode

The Bull-Bear Market Cycle Indicator indicated a bull-bear level last week when Bitsy dropped from $73,700 to $60,700. The decline was triggered by traders loading their cattle to realize higher profit margins.

CryptoQuant undisclosed profit margins rose to 69%, the highest level since March 2021 when BTC was trading around $60,000. Even though traders are selling their assets, the failure margin is at a high level of 47%.

“In fact, short-term bitcoin holders (including traders) have been selling at a high profit margin since May 2019. This shows that short-term bitcoin holders have profited since this last price that took Bitcoin to a new all-time high,” analysts said. he said.

Large BTC holders also unloaded their holdings as the price rose above $70,000. A total of 567,000 BTC were moved when the digital asset hit its peak on March 12, representing 35% of the total transactions on the Bitcoin network.

CryptoQuant said some of the biggest owners are Bitcoin miners. Miners have seen their biggest daily gains thanks to Bitcoin's recent rally, and the crypto asset has seen a significant uptick as BTC moves to the counters as it crosses $70,000.

The bull cycle is far from over.

Additionally, demand for BTC in the United States has decreased, as seen in Coinbase Premium, which went negative shortly after BTC reached $73,000. Analysts believe that if the correction continues, BTC may fall to the $58,000-$60,000 level, which is a price base for large short-term holders.

From a long-term perspective, BTC has yet to touch the peak of this bull cycle as shown by the low levels of new investment flows. Currently, 48% of Bitcoin investments come from short-term holders, historically, bull cycles usually end with 84%-92% of investments by this set of investors.

Additionally, valuation metrics are nowhere near levels consistent with past market bests. CryptoQuant's P&L index is still outside the market's high zone (red area) and above its 1-year moving average,” analysts added.