Bitcoin’s price dropped below $105,000 after making a new all-time high of $108,365 on Dec. 17. The short-term drop occurred ahead of the United States Federal Reserve’s interest rate announcement on Dec. 18. Currently, the market anticipates a 25-basis-point cut.

In spite of short-term volatility, one crypto analyst highlighted a bullish scenario taking shape, with long-term Bitcoin ( BTC ) holders positioning themselves for future gains.

Bitcoin LTH profit-taking drops from $10 billion to $3 billion

Bitcoin registered a surprising return of 37% in November 2024, reaching a new all-time high that was followed by a profit-taking frenzy. As Cointelegraph reported , selling pressure reached 366,000 BTC per month in November, estimated to reach around $10 billion.

In light of that, Percival, a verified Bitcoin analyst on CryptoQuant, highlighted that the magnitude of profit-taking has significantly cooled down over the past three weeks.

Double-digit drop in Bitcoin profit-taking metric hints it’s ‘ready’ to rally — Analyst image 0

Bitcoin net realized profit chart by Percival. Source: CryptoQuant

As illustrated in the chart, the profit realized by long-term holders dropped from $10 billion on Nov. 25 to $3 billion on Dec. 14, even though BTC prices rallied 12% during that time period. The analyst added:

“This means that LTH [long-term holders] has realized most of its profits at this stage and is ready to see further increases.”

Additionally, with the help of a 90-day market vs. realized price gradient oscillator chart, Percival explained that the index is in an equilibrium zone of 0.5, which indicates a neutral position between buyers and sellers.

Double-digit drop in Bitcoin profit-taking metric hints it’s ‘ready’ to rally — Analyst image 1

Bitcoin 90-day market vs. realized price gradient chart. Source: CryptoQuant

A strong balance between the two sides demonstrates the potential for an “upward phase,” as the crypto asset is neither overbought nor oversold.

Related: Bitcoin funding rate signals no signs of ‘late-cycle overheating’ — Analyst

Bitcoin price diverges with Coinbase premium

Despite the positive development of decreased profit-taking and a neutral trend, it is important to note the Coinbase premium has been falling since the beginning of December. Yonsei Dent, a pseudonymous crypto trader, highlighted that over the past two weeks, the premium has been on a “notable decline” with respect to BTC prices.

Double-digit drop in Bitcoin profit-taking metric hints it’s ‘ready’ to rally — Analyst image 2

Bitcoin price divergence with Coinbase premium. Source: CryptoQuant

The inverse correlation suggests that BTC’s rally was not supported by demand from US investors. The analyst added:

“It could indicate underlying weakness in medium-term upward momentum. Investors should remain cautious and monitor this development closely.”

Regardless of its BTC’s choppy market structure, Daan Crypto, an independent crypto trader, said that Bitcoin had followed last year’s price action. The trader expected the price to chop further as 2024 wraps up before an “actual breakout” in Q1 2025.

Related: Why is Bitcoin price down today?