The Bitcoin (BTC) price experienced massive swings on Friday, with traders on both the bullish and bearish sides getting liquidated as buyers of U.S. spot Bitcoin ETFs clashed with sellers taking profits.

Bitcoin began the day trading above $71,000 before sharply selling off during the Asian trading session. After plunging to as low as $65,500, BTC abruptly rallied back to $70,500 during U.S. hours. It last traded around $68,000, with leveraged futures positions worth $200 million wiped out, according to coinglass.com data.

This represented the most punishing day for bulls since March 4, when long positions worth $244 million were liquidated. Despite hitting fresh record highs near $74,000 on Thursday, Bitcoin has lost upward momentum as profit-takers appear to have seized control despite still elevated spot ETF demand.

On-Chain Data Shows Investors Eager to Realize Profits

Analysis from CryptoCon reveals the 30-day moving average of the Realized Profit/Loss Ratio, an on-chain metric, is at "absurd" levels not seen since 2013. This suggests investors sitting on large profits are getting "antsy to sell," though it doesn't necessarily signal a market top.

While Bitcoin is up over 60% year-to-date, fueled by massive spot ETF inflows that accelerated recently, the price has pulled back 7.5% from highs as profit-taking kicks in.

Historical Precedent Points to More Downside

Historically, Bitcoin has commonly retraced around 30% from local highs during bull markets. As recently as January, it dipped from $49,000 to $38,500. This precedent suggests the current pullback could extend, potentially retesting $50,000 lows.

However, the ETF story may be changing the game. Major institutions entering for the first time may be less price-sensitive and more inclined to "buy the dip," limiting future declines to 10-15% from highs. $60,000 could form a near-term floor.

What's Next for Bitcoin?

While $74,000 could mark the pre-halving high, this could set the stage for a breakout to fresh records later in 2024 as Bitcoin challenges $100,000. The current dip to the low $60,000s may offer an opportunity before renewed upside.