The rise of Bitcoin has divided investors.

Exciting developments are taking place in the cryptocurrency market. Following the FED's 50 basis point interest rate cut, the value of Bitcoin has shown a significant increase. With this rise, an important indicator referred to by CryptoQuant as "supply in profit" has surpassed a critical threshold, drawing the attention of investors. However, market experts are warning of a potential consolidation or correction in the short term, pointing to a slowdown in spot buying activity.

Analysts Cautious as Bitcoin Rises

Bitcoin (BTC) has entered a new upward trend during a period of increasing economic uncertainty worldwide. Following the U.S. Federal Reserve's (FED) decision to cut interest rates by 50 basis points, the value of the cryptocurrency rose by approximately 8%, reaching $63,516. This development has strengthened the expectation of a new bull market among market participants.

Julio Moreno, the Head of Research at CryptoQuant, stated that Bitcoin's recent rise has pushed the "supply in profit" metric above its 365-day moving average. Moreno suggested, "This milestone is generally associated with further price increases," indicating that Bitcoin could gain additional upward momentum.

The "supply in profit" metric represents the percentage of circulating Bitcoin that was purchased at a price lower than its current market value. When this ratio increases, it means that more Bitcoin holders are in profit. This situation can lead to a decrease in selling pressure and an increase in market confidence.

According to CryptoQuant's blog post, the level of supply in profit generally serves as an emotional criterion for investors and creates a significant support or resistance zone. The blog states, "When the price surpasses this level, optimism tends to increase; if it falls below, selling pressure can rise."

On the other hand, Bitfinex analysts recommend caution. They have observed that the initial rise in Bitcoin was triggered by spot market purchases, but this activity has since slowed down. This observation is supported by the flattening of the cumulative volume delta (CVD). CVD is a metric that measures the difference between cumulative buying and selling volume in the spot market over a specific period.

Bitfinex's latest report states, "We expect Bitcoin to consolidate in a new range close to current levels or experience a partial correction in the short term." This statement somewhat balances the enthusiasm in the market.

These developments in the cryptocurrency market once again demonstrate the increasing impact of blockchain technology in the financial world. The rise in Bitcoin's value and the increase in the "supply in profit" metric strengthen the trend of viewing digital assets as an alternative to traditional financial instruments.