On-chain data shows the Bitcoin profit-taking volume has shot up after the cryptocurrency’s price briefly broke above the $27,000 level.
Bitcoin Observes 2.4 Times As Many Profit Transfers As Loss Ones
According to data from the on-chain analytics firm Santiment, this profit-taking level has not been seen since December 2020. The relevant indicator here is the “ratio of daily on-chain transaction volume in profit to loss,” As its name already suggests, it measures the ratio between the Bitcoin volume of profit-taking transactions and that of loss-taking ones.
This metric tells us whether there is more profit harvesting in the market than loss realization or not right now. The indicator has a positive value if the profit volume is higher. Otherwise, it’s negative.
The indicator works by going through the on-chain history of each coin being sold/transferred to see the price at which it was last moved. If this previous selling price for any coin was less than the BTC value right now, then this particular coin moved at a profit, and thus, its transaction is counted under the profit volume. Similarly, if the…