Bitcoin Rally Stalls Below $110K as Short-Term Holders Take $11B Profits
Bitcoin (BTC) experienced a slight dip to $109,000 on Monday, following a weekend rise, as U.S. markets observed Memorial Day. Despite the pullback, BTC remains up 1.7% over the past 24 hours and nears its all-time high reached last week. This minor correction comes after a significant surge from April’s lows, approaching a 50% increase.
The CoinDesk 20 index highlights Uniswap (UNI), Chainlink (LINK), and Avalanche (AVAX) as top performers, with gains of 6.6%, 3.3%, and 3.4% respectively. These overnight gains were fueled by a temporary reprieve on EU tariffs announced by the Trump administration, delaying the implementation of 50% tariffs from June 1st to July 9th. This decision reversed an initial sell-off in risk assets, including cryptocurrencies, and led to a rebound in European stocks.
Bitfinex analysts suggest BTC has entered a volatile phase, with increased profit-taking by short-term holders potentially capping near-term upside. Short-term holders realized $11.4 billion in cumulative profits over the past month—significantly higher than the $1.2 billion in the prior month. This surge in profit-taking raises concerns that it could outweigh new demand, leading to price stagnation or a retracement.
The analysts emphasize the importance of the next few days in determining whether the dip to $106,000 marks a temporary low or the beginning of a more substantial correction. A deeper pullback would likely target the short-term holder cost basis of around $95,000.
However, despite the potential for short-term volatility, Bitfinex analysts remain optimistic about Bitcoin’s long-term prospects. Strong inflows into U.S. spot Bitcoin ETFs—totaling $5.3 billion in May—along with low volatility and a lack of market froth, suggest a likely resumption of the uptrend into the third quarter, following this anticipated pause. The recent market activity indicates a complex interplay between macroeconomic factors, regulatory uncertainty, and investor behavior.
