- Unlike previous cycles, today’s heated market could lead to a correction.
- If the price of Bitcoin falls, its high liquidity and volatility can send the price back up.
After the price increase to $30,000, the Bitcoin [BTC] network has entered a period of high profits. This information was disclosed by Alex Aldler Jr, a data analyst and Bitcoin research specialist.
Is your portfolio green? look at the BTC profit calculator
Using the Bitcoin Realized Profit/Loss metric, Alder showed that a lot of profit has been made on the chain.
A realized gain or loss occurs when a cryptocurrency is sold for a higher or lower price than it was purchased for. When the difference between the total consideration and the cost basis is positive, this implies a realized profit. On the other hand, a negative difference leads to a realized loss.
A hot market cannot stop the switch
According to the Bitcoin Realized Profit/Loss chart shared by the analyst, many market players had made big gains. Historically, this increase would trigger a significant correction.
However, Adler noted that this may not happen this cycle due to the FOMO surrounding the spot ETF filings and possibly approval.
The #Bitcoin network has entered a period of high profit levels. Previous entries to this level significantly slowed growth and led to market corrections. However, because of #ETF FOMO, this time things may be different.#btc pic.twitter.com/SH1VrnX160
— Axel ???????? Adler Jr (@AxelAdlerJr) October 22, 2023
Although the US SEC has made it clear that approval could be delayed until next year, many are still optimistic about one of the many applications will get the green light before 2023 ends.
As a result, market players have committed to remain active in the market. This resolute stance has also been crucial to the fact that the BTC price has only fallen slightly in recent days.
Meanwhile, Bitcoin liquidation levels Data from HyblockCapital showed aggressive buying at $29,886.
For context, liquidation levels are estimates of potential price levels at which leveraged traders’ positions could be closed after initial margins are reached. The cumulative delta of the liquidation level also showed that there was a lot of pressure on the economy buy lace.
Source: HyblockCapital
BTC may fall, but it is not the finish line
As a result, the price could fully recover, creating a bearish bias in the process. Should Bitcoin fall to $29,000 and market liquidity increase again, it could be a time to open more long positions.
In another post on X (formerly Twitter), Adler noted that active addresses on the Bitcoin network may continue to increase. This benchmark serves as a benchmark for the interaction with the public around a coin.
During the first quarter of the year, active Bitcoin addresses reached impressive levels. This led to a high inconstancy while generating profits for BTC holders.
Read Bitcoins [BTC] Price prediction 2023-2024
While the analyst mentioned that the network’s activity has decreased from last week, he also noted that active addresses could soon resume their speculation due to the ETF FOMO.
Last week saw a record number of transactions on the network; volume was equal to the peak in April.
Activity has slowed this weekend, but I don’t think this will impact the FOMO associated with the potential approval of an ETF.#BTC pic.twitter.com/8cgfO915Ay
— Axel ???????? Adler Jr (@AxelAdlerJr) October 22, 2023
When activity picks up again, volatility could become extreme, and that applies to BTC as well pause the $30,000 resistance. In a case where volume follows in an upward direction, Bitcoin could rise significantly above the aforementioned resistance.