(P1) The ratio of on-chain Bitcoin transactions taken in profit versus those at a loss hit a 12-week high of 3:1 on April 7, a metric that has historically signaled a potential local top for the asset's price.
(P2) "Bitcoin has seen its highest profit-to-loss transfer ratio in 12 weeks," on-chain analytics firm Santiment said in a post on X, highlighting the significant shift in network activity.
(P3) The 3-to-1 ratio indicates that for every transaction recording a loss, three transactions are realizing a profit. This level of profit-taking suggests an increase in selling pressure as holders, particularly those who have held the asset for a longer duration, decide to cash in on recent price gains.
(P4) This trend could lead to a short-term price correction or a period of consolidation for Bitcoin. The last time this ratio was similarly elevated, it was followed by a notable downturn in the market, making this a critical indicator for traders to watch in the coming days.
This article is for informational purposes only and does not constitute investment advice.
