Bitcoin Profit-Taking May Sustain Bull Market, Research Suggests

According to Cointelegraph, recent research indicates that Bitcoin (BTC) could continue its upward trajectory despite holders taking profits. In its latest Biweekly Report dated May 29, research firm Santiment maintains a positive outlook on the market, even as BTC/USD experienced a 10% decline. The report suggests that profit-taking does not necessarily signal the end of the bull market. By analyzing the Mean Dollar-Invested Age (MDIA) metric, which measures the duration coins remain in wallets without moving, Santiment found that the supply has been reactivating since mid-April. A decreasing MDIA, indicating that coins are being moved more frequently, is seen as a positive sign for bullish momentum. This trend suggests that older coins are re-entering circulation, enhancing utility and network growth. Since mid-April, Bitcoin's MDIA has been steadily declining, reflecting a shift in market dynamics. The average holding period for coins in wallets has decreased slightly over the past six weeks, from 443 to 426 days. While this indicates that holders are looking to secure profits, Santiment argues that such actions are essential for sustaining a rally. This behavior supports the notion that the market is in an active phase, rather than being driven solely by short-term speculation. Meanwhile, Bitcoin's price consolidation saw a dip below $105,000 after the May 29 daily close, marking a 10% correction from its recent all-time highs. Despite this, market sentiment remains optimistic, with expectations of a "healthy" support retest before further upward movement. Observers have noted significant amounts of BTC being withdrawn from exchanges, including a 7,000 BTC transaction on May 30, attributed to a single whale entity. Santiment also commented on the situation of Hyperliquid's James Wynn, a notable whale whose long BTC position was liquidated for $99 million as the price fell below $105,000. The liquidation of major long positions often leads to sharp price declines, as significant capital is no longer supporting the price. This development highlights the risks associated with large-scale trading positions. As always, readers are reminded that investment and trading decisions carry risks, and it is crucial to conduct thorough research before making any financial commitments.