Bitcoin: Breach of $30k triggers profit-taking surge

• Profit taking increased to a three-week high as BTC crossed $30,000.
• BTC, however, witnessed a more negative flow as its price increased.

In the last few months, the price of Bitcoin [BTC] has consistently encountered a psychological barrier at the $30,000 mark. Recently, Bitcoin surpassed this barrier, leading to a noticeable increase in activities and interest.

Read Bitcoin’s [BTC] Price Prediction 2023-24

Bitcoin profit-taking surges

As per a Santiment chart, there was increased profit-taking among certain Bitcoin holders, marking the highest level seen in nearly a month. Interestingly, this profit-taking activity was primarily driven by long-term holders.

Source: Santiment

Examining the Market Value to Realized Value (MVRV) ratio across various periods provided insights into the rationale behind this phenomenon. As of this writing, the intensity of profit-taking has subsided, resulting in a decrease in the ratio of daily on-chain transaction volume in profit to loss.

This ratio had declined to approximately 1.5%.

Bitcoin MVRVs show different profit margins for holders

Comparing the Bitcoin MVRV (Market Value to Realized Value) across different timeframes – 30, 60, 90, and 180 days – sheds light on why long-term holders were able to capitalize on the rising price. Analyzing the 30-day MVRV according to Santiment data, the increase in BTC price resulted in less than a 1% increase.

As of this writing, the 30-day MVRV was approximately 0.3%. This indicated that any sales by these holders would yield a mere 0.3% profit.

A closer look at the 60-day MVRV showed that holders within this timeframe enjoyed more substantial profits. As of this writing, the MVRV was around 2%. This implied a potential profit of 2% for holders that sold in this period.

Furthermore, the profitability of the 90-day MVRV has shown an increase of over 1% compared to the 60-day MVRV. As of this writing, the 90-day MVRV had exceeded 3.7%.

Source: Santiment

Lastly, the 180-day MVRV underlined that long-term holders emerged as the beneficiaries of the recent surge in Bitcoin’s price. Additionally, these long-term holders could have been among those who seized the opportunity to profit when the BTC price surpassed the $30,000 mark. Currently, the 180-day MVRV was over 6%.

More BTC flowing outside exchanges

Contrary to the profit-taking activity in the Santiment chart, the exchange flow metric revealed a distinct pattern. As observed through Glassnode’s exchange flow metric, the data for 8 August indicated a greater outflow of Bitcoin from exchanges compared to its inflow.

This notable outflow suggested that a larger volume of Bitcoin was being withdrawn from exchange platforms. 

Source: Glassnode

How much are 1,10,100 BTCs worth today?

Also, this phenomenon indicated that, despite the price increase, many holders were more inclined to transfer their Bitcoin holdings away from exchanges instead of immediately selling them.

BTC’s value continued to hover above the $30,000 mark, albeit with a minor downward trend becoming apparent.