Bitcoin’s move to a one-month high of $74,000 this week triggered a wave of profit-taking by short-term traders, according to data from CryptoQuant.
The largest cryptocurrency is trading around $69,000 after losing momentum since Wednesday’s breakout above $70,000.
CryptoQuant analyst Darkfost explains that short-term holders transferred over 27,000 BTC ($1.8 billion) to exchanges in profit over the past 24 hours, one of the biggest spikes in recent months.
The only short-term investors currently making profits are those who accumulated bitcoins between a week and a month ago, with a realized price of approximately $68,000, suggesting that some recent buyers are choosing to lock in profits rather than add to their positions.
Short-term holders are typically the most reactive group in the market, and their selling reflects lingering caution in light of the ongoing war in Iran.
CoinDesk analysis on Wednesday identified a possible bullish trap, as the price action mirrored that of January, when the price broke to $98,000 before turning lower.
And that drop came on Friday, accelerated by comments from US President Donald Trump, who demanded that Iran surrender unconditionally, a move that also sent the price of oil soaring.
Despite the profit-taking, broader factors are helping to support bitcoin’s rally, according to Adrian Fritz, chief investment strategist at 21Shares.
Fritz said traders are increasingly betting that the Clarity Act, a U.S. digital asset market structure bill, could pass by the end of the year. Prediction markets currently value probability at around 70%, although Fritz noted that these markets are relatively illiquid.
He also pointed out growing geopolitical tensions and strong institutional demand as key factors.
Some investors increasingly see bitcoin as a “gold beta” trade, becoming the asset after gold’s recent rally. Meanwhile, spot bitcoin ETFs have shown resilience, with their holdings falling only about 5% during the recent pullback and more than $700 million in net inflows this week.
While political developments may have helped fuel the move, Fritz said the rally is being supported by geopolitical hedging and growing institutional conviction in the asset.
