Bitcoin Market Expected to Take a ‘Breather’ as Traders Cash In Over $11.6 Billion in Profits
The cryptocurrency market is witnessing a notable shift as short-term Bitcoin holders have realized a staggering $11.6 billion in profits over the past 30 days. This development is prompting analysts to predict a potential pause in the bullish momentum of Bitcoin, especially following the cryptocurrency’s recent surge to an unprecedented all-time high of $111,800. ## Significant Profit-Taking Activity
According to insights from Glassnode, a well-respected analytics firm, short-term holders (STHs) of Bitcoin, often characterized as traders rather than long-term investors, have been cashing out significantly in recent weeks. The realization of profits peaked at approximately $747 million daily, marking a considerable increase from the previous $1.2 billion realized within the last month. This uptick in profit-taking occurs as Bitcoin’s price surged beyond the cost basis for short-term holders, which was recorded at $93,000. The data illustrates that the STH Realized Profit/Loss Ratio has seen a spike, with profits outpacing losses dramatically. Notably, only 8% of trading days in recent history have witnessed such a favorable profit margin for short-term traders. This pattern of profit-taking is common in bullish trends but can often signal the onset of a local market top, creating overhead supply resistance that may halt Bitcoin’s ascent.
Technical Indicators Suggest Cooling Momentum
Crypto analyst Axel Adler Jr. emphasized that Bitcoin’s price momentum has slowed down by 38% over a 30-day span, now sitting at only 19%. He described the market’s current state as a “technical cooldown” following a peak, suggesting a much-needed “breather” before any potential continuation of bullish activity. This ‘cooldown’ could foster a more stable environment for Bitcoin and its investors, allowing time for new demand to build.
Hyblock Capital echoed this sentiment, advising caution given that Bitcoin has been targeting short liquidity zones above current price levels, which has contributed to its recent performance. As the market experiences this potential pause, retail investor sentiment has dipped to a 90-day low, with only 31.59% of retail accounts maintaining long positions.
Indicators of High Liquidity and Potential Volatility
Despite the cooling sentiment among retail investors, open interest in Bitcoin futures is at a 90-day high, indicating robust liquidity levels. The combined order books are situated in the 91st percentile, which may lead to potential price volatility in the near future.
On May 23, Bitcoin experienced a sharp correction, plunging from $111,300 to $108,000 just prior to the opening of the New York trading session. This decline was partly triggered by geopolitical developments, specifically the announcement from US President Donald Trump regarding a 50% tariff on European Union imports, effective June 1, 2025, which added to global market uncertainties.
As a result of this price drop, Bitcoin’s open interest saw a significant reduction of $1.2 billion, indicating that traders were deleveraging as they adjusted their futures exposure in response to the rapid market shifts.
Market Outlook: Caution Amid Opportunities
Despite the recent sell-off, Bitcoin managed to rebound above the $109,000 mark, as speculators remained optimistic despite short-term fluctuations. Crypto traders are viewing any potential corrections as opportunities to buy into the market. Trader Honey noted that with the golden cross on the charts— a bullish signal— they would advise caution but also highlighted that dips could present favorable buying conditions.
As the Bitcoin market navigates this transitionary phase, investors are reminded that every trading decision carries risk and should be approached with prudent research and consideration.
This article does not constitute investment advice. Please conduct your own research before making any investment decisions.
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