Bitcoin Price Crosses $72,000 as Profit-Taking Cycle Cools

Bitcoin (BTC) price cleared the $71,000 resistance on Monday, March 11 sparking hopes of another bullish outing in the week ahead. On-chain data trends show that the profit-taking wave observed when BTC first broke above the $70,000 barrier has now reduced significantly. 

Can Bitcoin bulls capitalize on the positive momentum to drive prices above $75,000? 

Profit-Taking Cycle among Long-term Holders is Cooling Off

When Bitcoin price first cleared its all time-high above $69,000 on March 5 2024, it set-off a widespread profit-taking wave, which in turn triggered over $100 million worth of liquidations across crypto derivatives markets. Within the next 24 hours, BTC price briefly declined below $60,000. 

Fast forward 1 week, the profit-taking wave has cooled off significantly, as the bulls now set sights on higher BTC price milestones. 

Indicatively, Santiment’s Dormant supply shows the number of coins which had stayed unmoved for 3 years or more, that were traded on a specific date.  

As seen above, over 20,456 BTC which sat unmoved for 3-years were traded on March 8 as BTC initially broke above $70,000. But since then the number of dormant coins traded has been in a steep decline. At close of March 10, only 5,592 3-yr dormant coins were moved, about 73% less than last week’s peak. 

There is a widespread assumption that an asset that has just crossed a major psychological resistance, is at risk of a major pullback. Hence, a lot of existing investors look to trade their coins at key price levels to book some profits. 

However, after a week, the declining BTC dormant supply trend above suggests that the BTC profit-taking cycle might be winding down. From an on-chain perspective, the 73% decline in Dormant supply sale eases existing investor’s fears and encourages new entrants to look towards Bitcoin in the coming week.

BTC Price Forecast: $80,000 Target in Firm Focus

With selling pressure from long-term holders cooling, another wave of demand from Bitcoin ETFs and halving speculators could send BTC price into a major rally towards $80,000. 

However, in the near-term the psychological resistance at $75,000 could spur another profit-taking wave as observed at $70,000 last week.

But if the bulls can form a steady support base above $75,000 this week, it could trigger a rally towards $80,000 ahead of the halving. 

But on the downside, the momentum could swing bearish if Bitcoin price loses the $60,000 territory.

However, the Parabolic SAR indicator highlights the $62,500 territory as a major support level for BTC price. With the bullish halving speculations still raging, it unlikely that BTC will lose that key support level within the current market dynamics.