Bitcoin (BTC) has shown resilience amid regulatory headwinds by gaining more than 17% over the past two weeks, suggesting the asset is in the early stages of a bull market.
On March 30, it briefly exceeded $29,000 and then traded at around $28,500. Major cryptocurrencies such as Ethereum (ETH) and XRP (XRP) have also fallen, halting their rally in recent days.
According to on-chain data, some traders and whales (a colloquial term for people with large amounts of tokens) have taken profits after weeks of gains, which could drive a decline in the coming days.
“On-chain data points to three notable states in the context of Bitcoin’s current rally,” said analytics firm CryptoQuant in a note shared with CoinDesk.
“Short-term holders are profiting with the highest rate of return in over a year. Spending activity among large Bitcoin holders (whales) has increased recently, and their holdings have decreased slightly. And pricing momentum is building into the realm of overvaluation,” the memo says.
Data from CryptoQuant’s Short Term Output Profit Ratio tool (which calculates the ratio of received and paid prices for assets held between 1 hour and 155 days) shows a surge of over 1 over the past week, giving investors was selling the tokens it held to lock in profits.
Data tracking whale wallets shows that over 320,000 BTC were moved or used by large entities in the past week.
That said, CryptoQuant says Bitcoin is still “in a bull market” and the short-term decline does not indicate a broader decline.
｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Bitcoin Price Rally Stalls as Whales Take Profits: CryptoQuant