With the cryptocurrency market having seen significant growth in recent weeks, on-chain data suggests that some traders and large token holders, also known as “whales,” are taking profits after weeks of gains, according to a crypto analytics firm.
This could lead to a potential decline in the coming days, Coindesk reported, quoting a report from CryptoQuant.
Bitcoin BTC/USD has led the charge of the cryptocurrency bull run over the past two weeks, with a 17% increase.
Despite regulatory challenges, the digital asset has displayed resilience and could be entering a bullish phase.
The price of Bitcoin briefly reached $29,000 on Thursday before settling around $28,600 at the time of publication.
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Other major tokens such as Ether ETH/USD and Ripple XRP/USD have also seen gains, although they fell slightly over the past 24 hours.
“On-chain data shows three conditions that are worth noting in the context of Bitcoin’s current rally,” said CryptoQuant in a statement.
“Short-term holders are taking profits at the highest profit margin in more than a year. There’s a recent increase in spending activity in large Bitcoin holders (whales) and a slight decrease in their holdings. And price valuation momentum is increasing to overvaluation territory.”
The data from CryptoQuant’s Short Term Output Profit Ratio tool, which calculates the ratio of price received to price paid for assets held between one hour and 155 days, has spiked above 1 in the past week.
This indicates that investors are likely selling their token holdings at a profit.
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Image and article originally from www.benzinga.com. Read the original article here.