Last week, Bitcoin achieved a new all-time high (ATH), symbolizing a remarkable recovery from the lows experienced in April. The momentum and consistency of this rally led BTC to record its seventh consecutive green weekly close, marking the longest streak of this nature since October 2023.
However, the latest edition of the Bitfinex Alpha report cautions that this impressive streak may soon come to an end as traders begin to take profits. Additionally, BTC may face challenges in a potentially adverse macroeconomic landscape exacerbated by tariff tensions in the United States.
Increased Possibility of Pullback
Just 36 hours after reaching a new ATH, Bitcoin experienced a minor correction, dropping below its previous high of $109,590. This pullback was largely driven by rekindled fears of a global trade war, ignited by U.S. President Donald Trump’s proposal of 50% tariffs on European Union imports.
During this time, cryptocurrencies struggled due to the ramifications of Trump’s tariff announcement, while the Bitcoin perpetual futures market saw a significant unwinding of excessive leverage, intensifying the downside pressure on BTC and increasing the likelihood of a corrective move in the short term.
As we look ahead, the coming days will be crucial in determining whether BTC can stabilize above the $106,000 weekly lows. Profit-taking activities by short-term holders may potentially lead to a deeper market reset before another upward movement can be anticipated, as investors typically seize the opportunity to lock in gains during periods of rapid appreciation.
Short-term Holders Take Profits
According to Bitfinex, two distinct groups of sellers are emerging: those who purchased BTC during the dip and are now in profit, and those who previously incurred losses during the last correction but have since reached breakeven. On-chain data indicates that these investor cohorts are actively taking profits.
As BTC moved past $93,400, the short-term holder (STH) cost basis, profit-taking escalated. Over the last 30 days, STHs have realized profits amounting to at least $11.4 billion, with a daily peak of $747 million, a stark contrast to the $1.2 billion of cumulative profit reported in the preceding 30-day period.
Moreover, the surge in profit-taking is further reflected in the STH Realized Profit/Loss Ratio, which has surged to levels only observed during 8% of Bitcoin’s trading days historically.
“This dramatic shift highlights just how quickly investor sentiment and behavior can pivot when momentum returns. However, it also implies that some degree of consolidation is likely as the market digests this wave of distribution before attempting another leg higher,” commented Bitfinex analysts.
The complete post can be viewed at Bitcoin at Risk of Sharp Pullback as Traders Take Profit: Bitfinex, originally published on CryptoPotato.
