Data Shows High Profit Taking In These Cryptocurrencies
Gains had piled up across various cryptocurrencies during the bull market. It was during this time that digital assets across the space had rallied to new all-time highs, painting the charts a pretty shade of green. However, with the advent of the bear market, cryptocurrencies began to lose their value, but there have been various recoveries here and there. Data shows that 3 assets have seen massive profit-taking during such recoveries.
Gains From CryptocurrenciesA recent report from Santiment shows that investors have been pulling out their profits from three cryptocurrencies. These three digital assets were Aave, Chainlink, and Polygon, all of which had been seeing some rise in their price as the new week opened up.
It followed the rise in bitcoin price over $20,000, where some digital assets in the space went on to record double-digit gains in the same time period. However, investors in these particular assets had taken this as a sign to begin pulling out their gains. With each climb in price, the profit-taking had grown, indicating that investors had been waiting for such recovery to begin pulling out gains.
The early week price rises have led to high profit taking levels for #Chainlink, #Polygon, and #Aave. Typically, these can be some short-term top signals, but if accompanied by stability from #Bitcoin staying over $20k, there could be room for growth. https://t.co/1mWdvHXqxu pic.twitter.com/L1GEZoi5Gp
— Santiment (@santimentfeed) October 5, 2022
Santiment notes that trends like these can often point toward short-term top signals. This makes sense since profit-taking is a direct dump of tokens on the market, which increases the amount of circulating supply, and without enough demand to mop up this new supply, it can tank the price of the digital asset. However, the data aggregation firm also notes that it remains highly dependent on the price of bitcoin. If bitcoin were to hold firmly above $20,000, then these digital assets could see more upside despite the profit-taking, Santiment notes.
Time To Get Some Coins?Usually, the bear market is the best time to buy coins, especially when the general market is panic-selling its tokens. However, for these three cryptocurrencies, it may be far from the best time to begin putting money in them.
Their price movements are largely dependent on the performance of bitcoin, and bitcoin’s price is continuing to hold well above the $20,000 level as of the time of this writing. This has caused most digital assets in the market to maintain their gained value even with such massive sell-offs going off.
Total market cap falls to $929 billion | Source: Crypto Total Market Cap on TradingView.comFor example, Polygon (MATIC) is up 1.84% in the last 24 hours and 14.50% in the last seven days. This shows that the digital asset is maintaining its gained value. It’s a similar case for Chainlink, which continues to maintain above the $7.80 mark, as well as AAVE, whose price is up 2.13% in the last 24 hours and is trending just shy of $80.
The best time to buy these assets would be during the downward correction that is expected to follow this recovery. This will happen if bitcoin’s price were to fall below $20,000, where these digital assets would then price in the impact of the sell-offs highlighted by Santiment.
Featured image from Forbes, chart from TradingView.comFollow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…
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