Bitcoin (BTC) is once again at a pivotal moment in its price trajectory. After testing the critical resistance level of $106,406, the leading cryptocurrency faced rejection, sparking renewed debate over whether this is a temporary pullback or the start of a deeper correction. Despite strong momentum earlier in the week, signs of profit-taking and shifting market sentiment suggest caution ahead — even as the long-term path toward $100,000 remains within reach.
Rising Profit-Taking Signals Caution Among Holders
On Tuesday, Bitcoin experienced a record surge in profit-taking activity, according to on-chain analytics from Santiment. The network’s Net Profit/Loss (NPL) metric spiked dramatically, marking the highest level of realized profit in recent history. This indicates that a significant number of holders sold their BTC at an average profit, particularly around the $106,000 mark.
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Such spikes in NPL often precede short-term price corrections. When investors lock in gains en masse, it increases selling pressure — especially if those coins are transferred to exchanges. The data suggests many long-term holders may be cashing out after months of accumulation, which could temporarily disrupt upward momentum.
Dormant Coins Reenter Circulation
Another concerning signal comes from Santiment’s Age Consumed index, which tracks the movement of “sleeping” coins — those that haven’t moved from their wallets for extended periods. A sharp spike in this metric on Tuesday marked the largest such increase since mid-May 2024.
Historically, surges in dormant coin activity have preceded local tops in Bitcoin’s price. When whales or early adopters begin moving old holdings, it often means they’re preparing to sell. While not a guaranteed bearish outcome, the pattern adds weight to the idea that the current rally may be cooling off.
This resurgence of old supply suggests increased distribution activity — a phase where large holders redistribute BTC into the broader market, typically leading to consolidation or decline.
Institutional Caution Persists Despite Rising CME Exposure
Market sentiment among institutional players remains cautious, despite a slight uptick in exposure on the Chicago Mercantile Exchange (CME). According to K33 Research, both direct market participants and leveraged ETFs have increased their positions slightly — but still remain well below previous peaks.
For example, VolatilityShares’ 2x Long Bitcoin ETF now holds 54,025 BTC — up from 43,405 BTC on April 8 — yet still 23,485 BTC short of its December 17 high. Similarly, direct participant exposure follows a comparable trend.
“Insufficient inflows into these products have limited premium expansion, reducing the appeal of basis trades for direct participants,” noted K33 analysts.
This relatively low open interest compared to prior bull cycles reflects a more restrained institutional appetite. Rather than aggressively building positions, many large players appear to be waiting on the sidelines.
Offshore Perpetuals Show Stronger Leverage Activity
In contrast to CME’s muted activity, offshore perpetual futures markets are seeing growing participation. Nominal open interest (OI) for Bitcoin perpetual contracts reached levels last seen in November and December 2024 by late May.
What’s notable is that this growth occurred under volatile funding rate conditions — a mechanism used in perpetual swaps to balance long and short positions. High or fluctuating funding rates can lead to sudden liquidations, increasing market volatility.
K33 analysts observed: “While there’s clear demand for leveraged exposure, there’s no clear directional bias. This creates a structure prone to two-way liquidations, setting the stage for accelerated volatility.”
In simpler terms, traders are active — but they’re split between bullish and bearish bets. This kind of equilibrium often precedes sharp breakouts or breakdowns when one side gets wiped out.
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Bitcoin Price Outlook: Will $100K Still Happen?
At the time of writing, Bitcoin is trading near $105,400 — below the key psychological and technical resistance level of $106,406. This level was previously a strong support zone but has now turned into resistance after multiple rejections.
If BTC fails to reclaim and sustainably close above $106,406 on a daily basis, further downside could unfold. The next major support lies at $100,000 — a round number that often acts as both psychological anchor and liquidity zone.
Technical indicators also suggest weakening bullish momentum:
- The Relative Strength Index (RSI) on the daily chart sits at 53 and is trending downward toward 50 — the neutral threshold. A drop below 50 would confirm increasing bearish momentum.
- The MACD indicator has formed a bearish crossover, with the histogram dipping into negative territory and showing red bars growing in length — another signal of downward pressure.
However, the bull case isn’t dead. A decisive daily close above $106,406 could reignite upward momentum and open the path toward Bitcoin’s all-time high of $111,980.
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Frequently Asked Questions (FAQs)
Q: What causes Bitcoin price corrections after record profit-taking?
A: When large numbers of investors sell their holdings at a profit — especially after a sharp rally — it increases sell-side pressure. If these coins are sent to exchanges, it often leads to downward price movement as supply temporarily exceeds demand.
Q: Does rising CME open interest mean institutions are bullish?
A: Not necessarily. While increased exposure suggests some institutional interest, current levels remain below previous peaks. Limited inflows into leveraged ETFs and modest basis trade activity indicate caution rather than strong conviction.
Q: Why are dormant Bitcoin movements considered bearish?
A: Long-dormant coins moving after years often belong to early holders or whales. Their sudden movement can signal intent to sell, especially if followed by transfers to exchanges. Historically, such events have preceded short-term tops.
Q: Can Bitcoin still reach $100,000 despite current weakness?
A: Yes. Short-term corrections are common during bull markets. As long as macroeconomic conditions remain favorable and demand persists from retail and institutional investors, the $100K target remains achievable — possibly later in 2025.
Q: What technical levels should traders watch right now?
A: Key levels include $106,406 (resistance) and $100,000 (support). A daily close above resistance could trigger renewed buying. Conversely, a breakdown below $100K might accelerate selling toward lower supports like $95,000 or $90,000.
Q: How do perpetual futures affect Bitcoin volatility?
A: Perpetual contracts allow leveraged trading with funding rates that incentivize balance between longs and shorts. High open interest with unclear directional bias increases two-way liquidation risk, often leading to sudden spikes in volatility during sharp price moves.
With technical resistance holding firm and on-chain signals flashing caution, Bitcoin appears to be entering a phase of consolidation. Yet beneath the surface, structural demand remains intact. Whether this pause becomes a springboard toward $100K or a deeper correction depends on how quickly confidence returns — and who steps in to buy the dip.