On-chain data shows the Bitcoin network has seen a spike in profit transactions, something that has often led into local price tops in the past.
Bitcoin Has Seen Its Highest Profit-To-Loss Transfer Ratio In 12 WeeksBelow is the chart shared by Santiment that shows the ratio between the number of transactions falling in each group over the last few months.
As is visible in the graph, the ratio has witnessed a rapid surge for the Bitcoin blockchain recently, indicating profit transactions have outpaced the loss ones. Currently, the metric has a value of 2.95, which means that traders are making nearly three profit-taking moves for every loss-taking transfer. This is the highest level for the indicator in about 12 weeks.
In the chart, Santiment has highlighted past spikes in the metric. “Historically, this has been a short-term price top signal,” noted the analytics firm. Given this pattern, it now remains to be seen whether the latest surge in the ratio will also align with a local peak.
While the market sentiment turned bearish, the analytics firm had noted in the post, “Remember that markets typically move the opposite direction of the crowd’s expectations.” Bitcoin has made some recovery to kickstart the new week, so it’s possible that this contrarian effect of the crowd mood may be what has once again affected the cryptocurrency’s trajectory.
BTC PriceBitcoin has returned back to $69,200 following its recovery surge.
