The digital currencies are in red today as traders preferred taking profits.
Some digital currencies, including Cardano’s ADA token, were in the green, additional CoinDesk data reveals. At the time of this writing, bitcoin, ether, XRP, litecoin, dogecoin, stellar and bitcoin cash were all down over the last 24 hours.
When explaining these recent price movements, several analysts pointed to traders selling their cryptocurrency to realize a profit.
“I would agree some traders are taking profits,” said digital currency investor Marius Rupsys
“We had a very sharp move down (forced long liquidations to $29k),” which was followed by a short squeeze, a development that helped fuel a substantial increase in prices, he noted.
Nick Mancini, the research analyst at crypto sentiment analytics platform Trade the Chain, also weighed in on the situation, pointing to the compelling gains experienced so far this year.
“After such a large rise in price action, many traders and holders alike tend to take profits to protect their bottom line,” he stated.
“At a price of $44,4000, more than 82% of Bitcoin wallet addresses are ‘in the money.’ When we see the number of ‘in the money’ wallets above 80% you typically see investors begin to take profits,” emphasized, Mancini.
Gary Pike, director of sales and trading at crypto services firm B2C2, offered a similar outlook to the aforementioned market experts, but he also provided some technical analysis.
“In my opinion, this pullback is purely technical and profit taking,” he stated.
Only last month, bitcoin was trading for less than $30,000, “so it should be expected to have some pullback after a double top at $48k as the rally had become tired,” said Pike.
Other analysts also spoke to technical analysis, emphasizing that going forward, bitcoin will likely encounter resistance near $50,000.