The on-balance volume is going negative, due to which the Bitcoin price has initiated a fresh bearish spell since the early trading hours. In the past few days, the price has experienced a couple of huge bearish candles, one of which initially pulled the price within the key support zone and the other is now on the verge of breaking down from the lower threshold. With a loss of over $4000 in a day, the BTC price is falling under extreme selling pressure, which displays the massive involvement of not only the traders but miners as well.
The data from CryptoQuant suggests the miners’ reserves have dropped below April 2021 levels. The miners reserve often tells where the markets are heading next, as they hold very large holdings. This trend began in November 2023, which signalled a potential shift in market dynamics. The miners could be selling their coins to keep their operations alive as the Bitcoin hash rate has hit a new high of over 600 TH/s in the past few days.
Second, the most concerning on-chain indicator has been the active address count, which has been declining since reaching interim highs of over 1.2 million in the first few days of the month.
This was when the BTC price took off on the flight to mark a new ATH. The address count dropped much before the price marked a new ATH at $73,750. This suggests the traders began to extract the profit as soon as the price surpassed the previous ATH, which was close to $69,000. Hence, the current price action is a result of the decrease in buying pressure.
The following chart illustrates the surge in profit-taking by short-term holders, which echoed the previous pattern observed during the previous market peaks.
This appears to be quite unusual, as the levels have never soared to such an extent since 2021. As covered previously, almost all the BTC wallets were in profit, and hence it was largely expected that they would extract the profits in no time. The rise in profit-taking by short-term BTC holders suggests a major price action may be incoming for the Bitcoin price.