Bitcoin's Bumpy Ride: Profit-Taking Slows Momentum, What's Next?

Bitcoin's rally faces headwinds as profit-taking hits $650B and momentum slows. Will fresh catalysts emerge, or is range-bound trading the new normal?

Bitcoin's Bumpy Ride: Profit-Taking Slows Momentum, What's Next?

Bitcoin's surge to new heights hit a snag. Profit-taking by long-term holders has led to a slowdown in momentum. Is this a temporary breather, or a sign of things to come?

Long-Term Holders Cashing Out

On-chain data reveals that long-term Bitcoin holders are realizing substantial profits. Glassnode reports over $650 billion in profits realized this cycle, surpassing the last bull run. These profit-taking waves are hindering Bitcoin's upward trajectory, keeping it in a tighter range.

Bitcoin analyst James Check confirms that much of the selling pressure comes from holders who've held their Bitcoin for three years or more. Charles Edwards of Capriole Funds notes that Bitcoin's stagnation around $100,000 since January is largely due to long-term holders selling post-ETF launch.

Weakening Market Momentum

Besides profit-taking, Bitcoin's on-chain volume has decreased by roughly 32% in recent weeks. The move to $111,000 didn't spark a surge in trading activity. Spot volume is significantly below previous cycle peaks, signaling a lack of speculative intensity and reinforcing the consolidation narrative.

Futures markets also show signs of fatigue. While leveraged traders were active during the recent price surge, their appetite for risk appears to be waning. Decreasing annualized funding rates and 3-month rolling basis suggest a shift toward defensive strategies rather than aggressive long bets.

ETF Inflows Provide Support

Despite the headwinds, U.S.-listed spot Bitcoin ETFs have seen strong inflows. Between June 23 and 27, the 12 spot Bitcoin ETFs recorded a combined $2.22 billion in net inflows. BlackRock's IBIT led the way, pulling in $1.3 billion. These inflows have boosted investor confidence and helped Bitcoin hold steady.

Institutional accumulation is also accelerating among ETF issuers. BlackRock has been on a weeks-long buying spree, pushing its total holdings to a record $77.7 billion. Combined, the U.S. spot Bitcoin ETFs now hold $133.17 billion in net assets, representing roughly 6.25% of Bitcoin's total market capitalization.

What's Next for Bitcoin?

Bitcoin's price may remain range-bound due to reduced speculative pressure and weaker trading signals until a fresh catalyst emerges. Keep an eye on institutional activity, regulatory developments, and macroeconomic factors. The market is in a cool-down phase, but the long-term outlook remains positive.

So, is Bitcoin taking a breather, or is this the start of something bigger? Only time will tell, but one thing's for sure: the Bitcoin rollercoaster never gets boring! Buckle up, crypto enthusiasts, it's going to be a wild ride!