Bitcoin's Market Sentiment Shifts Towards Short-Term Profit-Taking

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Bitcoin,Cryptocurrency,Market Sentiment

Recent analysis reveals a shift in Bitcoin's market sentiment towards short-term profit-taking, potentially limiting its ability to reach new highs in the near future. Long-term holders are taking profits and short-term holders are accumulating with a focus on quick gains, driven by uncertain market events like the upcoming U.S. election.

market sentiment has changed significantly over the last few weeks. In fact, there were expectations that BTC will maintain its bullish momentum from September in October too. However, those expectations were far from the reality of things.

According to data, there is a growing trend that may limit the cryptocurrency’s ability to soar to new highs, at least in the short-term. A recent CryptoQuant analysis underlined the same, highlighting the changes in long term holder and short term holder dynamics. According to the analysis, LTH’s realized cap recently dropped by $6 billion. This suggested that LTHs have been taking profit. By extension, it also implied that they do not expect price to extend into new highs, at least in the short term.The same analysis highlighted a surge in short term holder realized cap by roughly the same amount . According to the analysis, this shift by STHs could mean that they are accumulating, but with a focus on short-term profits.

Uncertainties tend to support a short-term focus, which may explain why investors have shifted to their current short term profit-taking approach. The U.S election’s outcome may also trigger a major response, one that could be enough to push BTC from its current range. Note that this could either be bullish or bearish, depending on the outcome.

As far as short term expectations are concerned, Bitcoin traders should keep an eye out for liquidations. A short term profit-taking approach encourages more leverage, which may in turn lead to more exposure to liquidation events.Michael is a full-time journalist at AMBCrypto. He has 5 years of experience in finance and forex and more than two years as a writer in the crypto and blockchain segments.

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