Profit-taking is keeping Bitcoin in check and pushing the 40,000 mark back into the distance. But investors can capitalize on the course winners.
How won, so melted away: While the Bitcoin price was able to set a new high of over 40,000 US dollars just a few days ago, the crypto reserve currency is currently stumbling under the pressure of a wave of sales. With a minus of 3.7 percent on a daily basis, the crypto key currency is quoted at 34,837 US dollars at the time of going to press and has thus lost almost 6,000 US dollars in value in just three days.
At the same pace at which Bitcoin marched to its all-time high, things are currently going in the opposite direction. The market is cooling down again after the hot winter months. In view of the escalating price rally over the past few weeks, it is sorely necessary to take a breather.
To make it clear: In just one month, Bitcoin has grown from under 20,000 to over 40,000 US dollars — healthy growth looks different. After Bitcoin initially took a few months to get out of cover, after reaching the symbolic 20,000 mark, a hype suddenly formed that showed similarities to the bubble formation in 2017. After the Corona crash in 2020, it was first and foremost institutional investors who recognized the signs early and refreshed their BTC stocks on favorable terms, but in recent weeks more and more small investors have followed suit who quickly responded to the supposedly already wacky Bitcoin Wanted to jump on the train.
No wonder this pattern brings back memories of 2017, the year Bitcoin first met $ 20,000 and went to sleep shortly after in the crypto winter. So do investors have to dress warmly again?
Even if the current price development has similarities with the 2017 bull run, the courses differ greatly from one another. Probably the biggest difference to 2017 is the BTC investor type. Three years ago it was mainly private investors who tried their luck with Bitcoin, since then big money has found its way into the crypto market. This capital is parked in BTC much more sustainably than that of speculators.
Asset managers like Grayscale or companies à la MicroStrategy have long-term investments in BTC, and investor behavior is far more risk-averse than that of small investors. The most recent price turbulence, however, was mainly the result of derivatives traders who have leveraged themselves.
This shows an inherent conflict in the cryptocurrency: the trench warfare between speculators and long-term investors. On the one hand, those who are after the quick market, on the other, those who head for safe havens. The big question: Can Bitcoin be both a gamer asset and a stable store of value at the same time?
The answer: yes and no. Whether Bitcoin fulfills both functions depends on the time perspective. In the short term, the decision on direction should remain fiercely contested. Profit-taking with such rapid price increases is too seductive and lucrative. In the long term, a BTC investment should pay off more clearly for anyone who has staying power.
So the old hands of BTC learned their lesson from 2017 and know: After every low comes a high. As the following graphic from Glassnode shows, the percentage of Bitcoin used in the last three years is gradually catching up with the ATH level. Or to put it another way: Investors who joined the BTC ecosystem in 2017 continue to hold their Bitcoin.
According to Glassnode CEO Rafael Schultze-Kraft, this speaks against the assumption that investors are only lurking for the next all-time high in order to cash in quickly. A continuously increasing value of currently 35 percent ultimately indicates that most investors remain loyal to their Bitcoin for a longer period of time — or are speculating on even larger profit margins. Either way: Corrections offer buyers opportunities to buy more Bitcoin and so the current setback should also be a springboard for the next upward trend.