- The short-term holders are selling their momentum, and the derivatives data indicates an increase in the bearish sentiment towards Bitcoin.
- Spot inflows remain robust at $4.63 billion over 14 trading days, but new highs could require a macro or liquidity catalyst.
Bitcoin’s rally from April lows seems to have hit a pause as traders start taking profits and market buying momentum fades. Since falling to a low of $73,273 on April 9, Bitcoin has risen by almost 41% to reach as high as $107,380 prior to dropping back a bit. Some analysts argue that the cryptocurrency is experiencing consolidation instead of a new breakout.
According to Bitfinex analysts, the spot volume has decreased, and the taker buy pressure has weakened. Short-term holders, especially those acquired below $80,000, have started selling. This is a reversal of sentiment in almost three months of an upward trend.
The order flow metrics point to the absence of Bitcoin’s “vertical acceleration.” Rather, structural support continues to be important, and analysts cite the $94,000-$99,000 range as crucial. In case none of those levels breaks, the downside risk remains small. Nonetheless, it is highly plausible that a new all-time high could need a powerful driver like better macroeconomic conditions, continued ETF inflows, or wider global liquidity.
Derivatives, Historical Trends Point to Caution
The consolidation story is backed by derivative market data. According to Coinglass, on Tuesday, the long-to-short ratio fell to 0.90, its lowest since the beginning of the month. This reading suggests more bearish wagers and diminishing conviction in short-term outperformances.
Historically, Q3 has been the worst-performing quarter of the year in terms of average returns, only registering 6%. Analysts believe that price action will continue to be range-bound, and the momentum will be during the summer months.
According to Bitfinex analysts, the market is in a “waiting game.” Although buying activity is slowing, they underline that there is no big breakdown looming until key levels are broken. Last week, the price of bitcoin increased by 7.32%, making a close above the $108,000 mark. Nevertheless, on Monday, it retreated 1.12% and remains below the mark of $107,000 by Tuesday.
ETF Flows and Fed Policy in Focus
The institutional demand also plays a crucial role. According to Farside data, spot Bitcoin ETFs in the U.S. have now enjoyed 14 consecutive days of inflows with a net amount of $4.63 billion since June 9. The inflow of 2.2 $billion was termed as massive by economist Timothy Peterson, and he forecasts a 70% chance that the streak will continue, which would bolster the prices in the short term.
Although ETF inflows are consistent, the wider market trend might depend on the macroeconomic indicators. Investors are also keeping their eyes on the upcoming Federal Reserve meeting scheduled on July 30. A rate reduction would normally boost Bitcoin, but the CME FedWatch tool now only reflects a 19% chance of a cut.
According to some analysts, long-term holders have created selling pressure that Bitcoin is unlikely to reach above the $110,000 mark. According to Capriole Investments founder Charles Edwards, Bitcoin OGs, those who bought early, have steadily sold since ETFs gained approval in January.
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