Bitcoin recently hit a record high at $104,087, although it is currently struggling to maintain levels above $100,000, causing investor caution. The market is described as high-risk, particularly when analyzing the Net Unrealized Profit/Loss (NUPL) metric, which is significantly above the four-year average, hinting at potential corrections ahead.
This heightened NUPL indicates that many investors are in unrealized profit, often leading to a shift from euphoria to profit-taking. When profit-taking begins, sell-offs can quickly lead to price declines, transforming market sentiment from bullish to bearish.
Realized profits have decreased significantly from $10.5 billion to $2.5 billion daily, a 76% drop, indicating more impulsive than sustained profit-taking. This significant reduction in profits suggests cooling market conditions as investors await clearer future directions.
Bitcoin's current position is volatile, with prices ranging between $100,000 to $89,800. It could reach $105,000 if it breaks above $100,000 and sustains it. However, failure may cause a retest below $89,800, with potential drops toward $85,000 or even $75,000 if selling pressure escalates.
Perseverance in reclaiming the $100,000 level is crucial amidst bullish sentiment. Nonetheless, the high NUPL metric implies genuine risks of a market correction in the near future.
