Demand for Bitcoin (BTC) experienced a decline prior to the halving event, as reported by CryptoQuant, a crypto analytics firm. The firm observed that investors chose to take profits before the event, which occurred on Friday night and resulted in a reduction of Bitcoin’s block rewards from 6.25 BTC ($398,134) to 3.125 BTC ($199,067).

According to CryptoQuant, traders in the perpetual futures market are capitalizing on increased volatility and geopolitical concerns by securing their gains. The firm suggests that Bitcoin investors may be waiting on the sidelines for the ongoing geopolitical uncertainty in the Middle East to subside.

During this period of market turmoil and tensions in the Middle East, traders with long positions have decreased their exposure to Bitcoin and cryptocurrencies in general. This is evident in the taker Buy Sell Ratio falling below one, which implies that sell orders outweigh buy orders. Typically, prices rally when the Buy Sell Ratio is above 1, indicating that buy orders dominate sell orders.

Additionally, CryptoQuant highlights that large holders and exchange-traded funds (ETFs) have been acquiring less Bitcoin, attributing this to market uncertainties and structural changes resulting from the halving.

However, there is one bullish metric that CryptoQuant points out. The recent sell-off has reset traders’ unrealized profits, historically signaling a potential market bottom in bull cycles. Market participants are seemingly recalibrating their positions, leading to a decrease in immediate demand and price stabilization.

As of the time of writing, Bitcoin is trading at $63,655.

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