Bitcoin's Potential Price Dip: Retail Investors Take Profit
Bitcoin's Next Price Move: Is a Dip Imminent?
New research suggests Bitcoin (BTC) might be forming a local bottom as retail investors take profits. On-chain data indicates significant activity from short-term holders (STHs), impacting Bitcoin's price action.
Key Indicators:
- Profit-Taking Behavior: Short-term Bitcoin holders are moving BTC to exchanges to secure profits.
- Exchange Inflows: The proportion of exchange inflows from STHs has reached levels typically associated with local bottoms.
- Key Support Level: A prominent bid level on Binance is now at $117,500.
Exchange Inflows Signal Potential Price Floor
CryptoQuant's analysis reveals that Bitcoin retail investors are reducing their BTC holdings as prices hover around $120,000. These exchange inflows are primarily from newer investors or short-term holders (STHs).
Amr Taha noted, "Increased Short-Term Holder (STH) Activity on Binance Signals Potential Profit-Taking."
The Binance Exchange Inflow Ratio for STHs, which measures inbound transactions from entities holding for six months or less, recently exceeded 0.4. Taha indicates that this level often aligns with local bottoms.
"The latest spike above 0.4 suggests that retail participants may have started depositing their Bitcoin holdings en masse to Binance, likely in an attempt to secure profits following a strong upward price trend," Taha explained.
"The STH cohort — typically holding BTC for less than 155 days — has a tendency to sell during upward trends, and the current ratio reinforces this behavior.”
Trading Activity Surges Across Exchanges
Recent all-time highs have reignited trading activity across crypto exchanges. Binance recorded the largest single-day increase in spot trading volume, capturing 52% of the market share on July 18, according to CryptoQuant.
"Crypto.com, Coinbase, Bybit, and OKX also showed relatively high spot trading volume.”
Focus on $117,500 as a Key Level
Analysis suggests potential "seller exhaustion" after profit-taking caused BTC/USD to fluctuate between $116,000 and $120,000.
Traders anticipate another upward movement for Bitcoin, even with capital shifting into altcoins.
CoinGlass highlighted that exchange order-book bid liquidity favors $117,500 as a potential price magnet. Monitoring liquidity clusters remains crucial for understanding short-term BTC/USD movements.
Disclaimer: This analysis is for informational purposes only and not financial advice. Trading cryptocurrencies involves risk. Conduct thorough research before making any decisions.
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