Bitcoin price ‘breather’ expected as short-term traders realize $11.6B in profit

Bitcoin’s recent price surge to a new all-time high of $111,800, while impressive, shows signs of potential market correction. Analysis of on-chain data reveals significant profit-taking by short-term holders (STHs), suggesting a possible pause in the bullish trend.

Glassnode’s data indicates STHs realized a remarkable $11.6 billion in profits over the past 30 days, peaking at $747 million in daily profits. This substantial profit-taking, exceeding the previous 30-day total of $1.2 billion, highlights a shift in investor sentiment and mirrors patterns often seen before local market tops. The STH Realized Profit/Loss Ratio has spiked, with profits significantly outweighing losses, a condition observed on only 8% of trading days historically. This level of profit-taking, while typical during bullish trends, often precedes a market slowdown. The influx of supply from profit-taking could overwhelm new demand, creating resistance and potentially halting Bitcoin’s upward momentum.

Technical indicators also point towards cooling momentum. Bitcoin’s 30-day price momentum has decreased by 38%, currently at 19%, a “technical cooldown” according to analyst Axel Adler Jr. Hyblock Capital similarly advises caution, noting Bitcoin’s recent price increases targeted short liquidity zones, a pattern suggesting potential vulnerability. Retail investor sentiment is at a 90-day low, with only 31.59% holding long positions, contrasting with a 90-day high in open interest. This combination signals high liquidity and potential price volatility.

The recent price drop to $108,000 from $111,300, triggered by President Trump’s tariff announcement on European Union imports, resulted in a $1.2 billion reduction in Bitcoin open interest, indicating deleveraging. Despite this initial sell-off, Bitcoin rebounded above $109,000. While some view potential corrections as buying opportunities, caution is warranted given the significant profit-taking and cooling technical indicators. The market may require a “breather” before resuming its rally. This information is for informational purposes only and does not constitute financial advice.