Bitcoin's downturn may stabilize with a 76% drop in realized profits

Bitcoin's daily realized profit metric has plummeted by 76%, reflecting a cooling in market enthusiasm following the cryptocurrency’s historic rally to $100,000. According to crypto analysts, this decline in realized profits indicates a significant reduction in sell-side pressure, suggesting that near-term Bitcoin price drops may be less severe than last week’s sharp 10% plunge. However, opinions on the market’s future trajectory remain divided.  

“With realized profits falling dramatically and sell-side pressure easing, we can expect future price declines to be less abrupt than last week’s steep drop,” Bitfinex analysts stated in their Dec. 9 market report.  

Bitcoin recently experienced a notable price correction. On Dec. 6, the cryptocurrency dropped almost 10% within a 24-hour window, falling from $103,493 to under $93,000. This sharp decline followed its breakthrough past $100,000 for the first time on Dec. 5. CoinMarketCap data reveals that the sudden dip from $98,338 to $92,957 triggered over $303.5 million in liquidations of long positions within an hour. Over the entire 24-hour period, total liquidations surpassed $404 million, according to a report by Cointelegraph.  

Despite this volatility, analysts at Bitfinex observed signs of stabilization in the market.  

“Realized Profit (RP), a metric that tracks USD gains from moved coins, peaked at $10.5 billion daily during Bitcoin’s surge to $100,000. It has since declined to approximately $2.5 billion per day, marking a significant 76% drop,” the analysts explained. This steep decline in realized profit suggests that profit-taking has “significantly cooled,” and further sell-offs may be “less dramatic.”  

At the time of writing, Bitcoin is trading at $97,483, according to CoinMarketCap data.  

Bitfinex analysts also noted that Bitcoin’s funding rates are beginning to stabilize, signaling a shift to a “more balanced phase” in the market. They predict reduced volatility and less erratic price movements in the medium term. Current data from CoinGlass indicates that Bitcoin’s funding rate on Binance, the world’s largest cryptocurrency exchange, is at 0.01%.  

However, not all analysts are convinced about the market’s stabilization. Glassnode lead analyst James Check expressed skepticism, citing ongoing sell-side pressure.  

“Sell-side pressure from existing holders remains substantial and, in my view, significantly outweighs demand from institutional investors such as ETFs and MSTR,” Check stated in a Dec. 9 post on X. He added, “There are numerous heated signals in the market.”  

Long-term Bitcoin holders, meanwhile, are sitting on considerable profits. The Long-Term Holder (LTH) realized price, which represents the average cost basis for long-term Bitcoin holders, stands at $24,481. This indicates an average gain of approximately 400% for these holders.  

Cointelegraph recently reported that Bitcoin’s surge toward $100,000 has led to significant selling activity among long-term holders. Some analysts believe this could mark a potential market top, warning traders to remain cautious.  

“It’s like a game of musical chairs: enjoy the ride, but be ready when the music stops,” CryptoQuant contributor Maartuun cautioned in a Dec. 8 post.  

As Bitcoin navigates this transitional phase, the market’s next moves will depend on the interplay between sell-side pressure, profit-taking, and fresh demand from institutional and retail investors. While some see stabilization on the horizon, others warn of continued volatility in the coming weeks.