Key takeaways:
Bitcoin price maintains its bullish momentum, but a sentiment indicator suggests the market could be overheating.
Data highlights Bitcoin traders taking profits and a lopsided market angled toward longs.
Analysts warn of a potential short-term correction, especially if gold weakens or seasonal trends play out.
Optimism has returned to the crypto markets, and many traders believe Bitcoin (BTC) price is on the path to new all-time highs. In just one month, Bitcoin surged 39%, briefly crossing the $105,000 mark. According to Glassnode analysts, “there are signs of renewed market strength, and the market is trading within a profit-dominated regime.”
Still, not everyone is convinced the rally will continue unchecked. Some investors are already taking profits, pushing Bitcoin’s realized cap to an all-time high of $889 billion. Even more profit-taking is expected at the $106,000 level.
Historically, euphoric market sentiment has often led to periods of consolidation—or even sharp corrections. That risk may be growing, particularly as gold, whose price action Bitcoin has closely mirrored in recent months, is showing signs of fatigue and could be heading for a correction itself.
Most investors are back in profit
The recent Bitcoin rally has returned over 3 million BTC to a profitable state, according to Glassnode. This shift has reignited capital inflows, which exceeded $1 billion per day, suggesting strong demand-side interest and a market willing to absorb selling pressure. Even most short-term holders who were underwater since the December 2024 peak have seen their portfolios turn green.
BTC short-term holders’ relative unrealized loss. Source: Glassnode
This relief, both financial and psychological, is already translating into spending behavior. The net difference between short-term holders’ transfer volume in profit versus at a loss has swung sharply to +20%—a notable reversal from the -20% seen during the capitulation phase at the end of April.
Institutional investor confidence is also rebounding. Over the past three weeks, more than $5.7 billion has flowed into Bitcoin ETFs, according to…
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