Bitcoin (BTC) and Ethereum (ETH) are still rallying because the prices of the digital assets crossed over into pre-FTX crash levels. They proceed to see green movements available in the market, posting gains right now, but this may occasionally not proceed for long.
Bitcoin And Ethereum Are Being Dumped
In a post shared by Santiment on Twitter, the on-chain data aggregator revealed that there was massive profit-taking happening across the 2 largest cryptocurrencies available in the market. On condition that each assets have seen massive gains since January began, that is comprehensible as investors would need to take profit off the highest of their investments, however it could also spell bearish sentiment for them.
In response to the chart Santiment shared, the extent of profit-taking being recorded across Bitcoin and Ethereum has surged to 2021 levels. 2021 was the 12 months when the bull run was at its peak, triggering massive profit-taking.
BTC and ETH profit-taking reach 2021 levels | Source: Santiment
Because the chart above shows, Bitcoin’s profit-taking rose to February 2021 levels, while Ethereum surged higher to October 2021 levels, just before the digital asset had hit its all-time high price of $4,800. This might have severe implications for the present mini-bull run being experienced.
How Could This Affect The Crypto Market?
As Santiment points out, the quantity of profit-taking happening could point to a belief amongst investors that the rally won’t last. If holders are selecting to sell, then they probably need to take out profit before what they consider could be an inevitable downturn.
In the event that they are right and the highest of the present rally has been marked, then it could mean the downward correction comes out lower than expected. Bitcoin will likely fall below $20,000 in that scenario and Ethereum would lose its footing above $1,500 over again.
In February 2021 when bitcoin had seen such levels, its price had lost over $10,000 of its value. As for Ethereum, it had fallen by greater than $1,000 in the next months.
As with previous times when profit-taking has been this high, the costs of Bitcoin and Ethereum are expected to fall in tandem. And if history is anything to go by, such a drastic fall from current prices could put each digital assets at prices well below their cycle lows. Moreover, it could mean that the underside has not been reached, unlike what many within the space consider.
The worth of BTC is currently trading at $21,267 and Ethereum is seeing prices of $1,570. BTC’s price is up 2.13% within the last 24 hours and ETH’s price is up 1.82% in the identical time period.
BTC recovers above $21,000 | Source: BTCUSD on TradingView.com