Intense profit taking halts Bitcoin’s surge to new highs, expert reassures it’s a ‘perfectly normal’ occurrence.

Bitcoin’s climb to $71,375 on March 26, just shy of its record high, was halted by increased profit-taking activity, according to analysis from Glassnode. The firm’s data showed that as Bitcoin’s price dropped from its all-time high to a recent low of $61,200, around 2 million Bitcoin went from being in profit to being in loss. However, as the market recovered slightly, about 1 million of these coins returned to being in profit due to high transaction volume at these elevated price levels. This behavior represents one of the most significant supply clusters during pullbacks since 2022, Glassnode said. The firm also highlighted that a significant portion of the 2 million Bitcoin, which had a new cost basis above $61,200, had changed hands recently, indicating that previous owners were actively cashing in on profits. The Spent Output Profit Ratio (SOPR) metric variations also supported the theory of increased profit-taking, with the Entity-Adjusted SOPR variant reaching levels last seen during the 2021 bull market peak. During the rally to the all-time high of $73.2k, more than $2.6 billion in realized profit was secured through on-chain transactions, with 40% of this attributed to Long-Term Holders, Glassnode said. The firm speculated that some of these investors included those divesting from the Grayscale Bitcoin Trust (GBTC), which has seen significant outflows since converting to a spot ETF. Short-term holders reportedly locked in the remaining $1.56 billion in profits, taking advantage of the inflowing liquidity and bullish momentum. Glassnode concluded that this trend is not unusual and has been observed in previous all-time high cycles. Clive Thompson, a former director in Swiss banking and Bitcoin proponent, described it as a “tug-of-war between Bulls and Bears” that typically leads to a temporary market pause. Thompson also noted the recent shift in ETF inflows, which turned positive on March 26, and suggested that if they continue to be positive, the Bitcoin price is likely to surpass previous records and climb higher. Glassnode’s observations come as the cryptocurrency market is in a recovery phase, with Spot Bitcoin ETFs seeing the largest inflow since March 13.