Bitcoin price breather expected as short-term traders realize $11.6B in profit

Bitcoin’s Price Momentum Cools as Short-Term Holders Take Profit

Bitcoin (BTC) recently surged to a new all-time high, but on-chain data suggests the bullish momentum might be slowing. Short-term holders are taking profits, and technical indicators point to a potential “breather” in the market. This analysis provides a review of the current market trends, potential volatility, and factors influencing Bitcoin’s price. As reported by Cointelegraph, profit-taking and broader market factors are contributing to the current market situation.

Profit-Taking by Short-Term Holders

Data from Glassnode indicates that short-term Bitcoin holders (STHs) have realized substantial profits over the past month. These STHs, often considered traders rather than long-term investors, have collectively secured $11.6 billion in profits. This surge in profit-taking follows Bitcoin’s price rebound, surpassing the STH cost basis of $93,000. Daily profit-taking peaked at $747 million, a significant increase from the previous 30-day period, signaling a shift in new investor sentiment.

The STH Realized Profit/Loss Ratio has spiked, with profits significantly outweighing losses. Such levels of profit-taking are common during bullish trends but often precede local market tops. Excessive profit-taking can overwhelm new demand, creating supply resistance and potentially halting Bitcoin’s upward trajectory.

Technical Indicators and Market Sentiment

Crypto analyst Axel Adler Jr. noted that Bitcoin’s 30-day price momentum has slowed by 38%, currently at 19%. Adler described this as a “technical cooldown,” suggesting the market needs a breather before resuming its rally. Similarly, analysis from Hyblock Capital advised caution, noting that Bitcoin consistently targeted short liquidity zones above current prices, driving its recent highs.

Retail sentiment is currently at a 90-day low, with only 31.59% of retail accounts holding long positions. Conversely, open interest is at a 90-day high, and combined order books sit in the 91st percentile, signaling high liquidity and potential volatility. This divergence between retail sentiment and open interest suggests a complex market environment.

Bitcoin’s Price Drop and Market Reaction

Bitcoin experienced a sharp decline, dropping from $111,300 to $108,000 before the New York trading session opened on May 23. This price dump was triggered by US President Donald Trump’s announcement of a 50% tariff on European Union imports, effective June 1, 2025, sparking global market uncertainty.

The price plunge resulted in a significant $1.2 billion reduction in Bitcoin open interest, signaling a wave of deleveraging as traders reduced futures exposure.

🚨LATEST: #Bitcoin open interest exhibits a $1.2 billion position flush after $BTC drops below $110,000. pic.twitter.com/0ee46BiHGD

— Cointelegraph Markets & Research (@CointelegraphMT) May 23, 2025

Despite the initial sell-off, Bitcoin rebounded above $109,000, with speculators dismissing the sell-off period. Crypto trader Honey pointed out that any corrections could be potential buying opportunities, stating,

“As expected we pumped and now that the golden cross has happened on BTC, we generally see a market-wide pullback so I’d be cautious here. Dips are for buying.”

Conclusion

In summary, Bitcoin’s recent price movements and market indicators suggest a potential cooling period. Profit-taking by short-term holders, coupled with technical cooldowns and global economic factors, contribute to the current market uncertainty. While retail sentiment is low, high open interest signals potential volatility. Investors should remain cautious and consider potential buying opportunities during market dips. Keep an eye on crypto regulation updates to stay informed about potential market impacts.