Key points:
- Bitcoin is trading back below its recent all-time highs, testing support at levels first encountered in late 2024.
- A “deeper pullback” may occur before bulls regain momentum for price discovery.
- Profit-taking is identified as a primary driver of current resistance.
Bitcoin (BTC) faces the risk of a “deeper correction” as the next phase of its bull market experiences a temporary setback.
Bitcoin Profit-Taking Causes Bull Run Hiatus
Analysts are warning of potential prices below $100,000 as data reveals an 8% drop in BTC/USD.
Bitcoin dipped below its previous all-time highs on May 31, with the current correction nearing $9,000 below its recent peak.
After bulls met resistance, on-chain indicators began to suggest a slowdown in bullish momentum.
CryptoQuant’s research report noted that “some of Bitcoin’s demand metrics may be reaching a short-term top, which could imply a pause in the current rally.”
“CryptoQuant’s estimate of Bitcoin’s demand growth in the last 30 days is at 229K, which is near the previous demand growth top of 279K Bitcoin reached in December 2024,” they stated.
“Additionally, whale-held Bitcoin balances have increased by 2.8% over the past month, a pace that often precedes a slowdown in whale accumulation.”
CryptoQuant further indicated that unrealized profits exceeded 30% at $111,000, hinting at a potential pause.
BTC Price “Deeper Pullback” Expected
Market participants anticipate lower levels before a return to price discovery, maintaining a generally bullish outlook.
“On the daily chart, BTC has broken below the previous all-time high and is facing rejection at that same level,” trader Mags wrote.
“This might look like the start of a deeper correction.”
Mags emphasized the importance of the upcoming weekly candle close as a critical test of bullish strength. Maintaining the old record close at $104,450 from December 2024 is crucial.
“If BTC closes below the horizontal support and resistance line on the weekly, we could see a deeper pullback possibly forming an inverse Head and Shoulders before the next leg up,” he concluded.
Trader and analyst Aksel Kibar suggested that the bull market’s resurgence “might be delayed.”
“Bullish interpretation intact as long as price holds above 73.7K,” he shared, referencing the monthly BTC/USD chart.
Kibar maintained his midterm target of $137,000, a level anticipated throughout 2025.
CryptoQuant anticipates an earlier price target, identifying $120,000 as a key profit-taking zone.
Why It Matters
This potential correction is significant because it could shake out leveraged positions and provide a better entry point for long-term investors. A break below $104.5K could trigger further downside, while holding above this level would signal continued bullish strength.
Market Impact
| Indicator | Current Value | Potential Impact |
|---|---|---|
| BTC Price | ~$102,000 | Further decline if $104.5K isn’t reclaimed |
| Whale Holdings | Increased by 2.8% in the last month | Slowing accumulation could indicate reduced buying pressure |
| Unrealized Profits | >30% at $111,000 | Increased selling pressure at higher levels |
Expert Take
In my opinion, while a deeper pullback is certainly possible, the overall bullish narrative for Bitcoin remains intact. The long-term fundamentals are strong, and any significant dip should be viewed as an opportunity to accumulate. However, traders should be cautious and manage their risk accordingly.
Actionable Insight
Traders and investors should closely monitor Bitcoin’s price action around the $104.5K level. A sustained break above this level would signal a continuation of the bull run, while a failure to reclaim it could lead to further downside. Consider setting up buy orders around key support levels (e.g., $95,000, $90,000) and be prepared to adjust your strategy based on market developments.
Conclusion
While the Bitcoin bull run might face a temporary delay, the long-term outlook remains positive. Monitoring key levels and understanding market dynamics will be crucial for navigating the coming weeks. Stay informed and trade wisely.