Bitcoin has risen above $50,000 for the first time since December 2021, more than two years ago. The crypto asset broke through several resistance levels.
However, maintaining this psychologically significant threshold proved difficult as Bitcoin fell back to the $49,800 mark on Tuesday. There is a key resistance level that, if challenged, could create selling pressure in the Bitcoin market.
In fact, there are signs of increased investor profit-taking following the recent jump.
Another Bitcoin resistance in play
Lookonchain, a well-known on-chain analytics platform, pointed to data from ITB and revealed that around 375,000 addresses purchased around 119.48,000 Bitcoin worth a total of $6 billion at an average price of $50,227.81.
After a brief stint in the profit zone, these addresses are back in the red, which could lead to selling pressure when the break-even point is reached.
Bitcoin had recently climbed above $48,491, with over 800,000 addresses accumulating around 270,000 BTC. This cohort of Bitcoin holders has slipped into the green after almost two years.
Bitcoin's upside potential appears to be at risk as investors show increasing interest in taking profits following the correction.
A similar view was expressed by a CryptoQuant analyst, who pointed out that 97.3% of unspent transaction output (UTXO) is currently in a profitable state. This suggests that there could be selling pressure in the near term if Bitcoin investors decide to take their profits.
Institutional demand for Bitcoin is increasing
The Coinbase Advanced exchange, which is primarily used by institutional investors, saw a huge outflow of Bitcoin.
This could show that while certain groups of Bitcoin investors have turned to dumping assets to make profits, institutional investors are moving their holdings away from the exchange and are in no mood to dump them despite the market rally.
This trend essentially highlights the growing demand for Bitcoin among institutional investors who previously experienced a loss of confidence.
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