In the grand theater of finance, where fortunes are made and lost with the flick of a digital switch, last week saw Bitcoin ascend to a new zenith, a glorious all-time high (ATH) that seemed to mock the depths of despair it had plummeted to back in April. The relentless march of this digital gold, with its seventh consecutive green weekly close, was a sight to behold—longest such streak since the fateful October of 2023, a month that will forever be etched in the annals of cryptocurrency history.
Yet, as the sun sets on this euphoric rally, the latest edition of the Bitfinex Alpha report whispers ominously of impending doom. Traders, those crafty profit-takers, are beginning to cash in their chips, and the winds of an unfavorable macroeconomic climate, stirred by tariff tensions in the United States, threaten to rain on this parade.
Increased Possibility of Pullback
Ah, but within a mere 36 hours of reaching that glorious ATH, Bitcoin, in a fit of humility, corrected itself, tumbling below its previous high of $109,590. This sudden descent was not without cause; it was the specter of a global trade war, reignited by none other than U.S. President Donald Trump, who proposed a staggering 50% tariff on European Union imports. Who knew tariffs could be so thrilling?
As cryptocurrencies grappled with the fallout of Trump’s tariff announcement, the Bitcoin perpetual futures market experienced a dramatic flush, as if the digital currency had consumed one too many spicy tacos. Excessive leverage unwound, adding to the downward pressure on BTC and increasing the likelihood of a corrective move in the short term. Who needs a rollercoaster when you have Bitcoin?
In the coming days, we shall see if BTC can stabilize above the $106,000 weekly lows, but beware! The profit-taking frenzy by short-term holders could lead to a deeper reset before the next ascent. After all, when Bitcoin dances to the tune of appreciation, investors are quick to lock in their gains, as if they were snatching the last piece of cake at a party.
Short-term Holders Take Profits
According to Bitfinex, we now have two types of sellers in this grand bazaar: those who bought the BTC dip and are now basking in profits, and those who were left in the lurch during the last correction, now finally above breakeven. These cohorts of investors are already cashing in, as the on-chain data reveals.
As Bitcoin surged past $93,400, the short-term holder (STH) cost basis, profit-taking accelerated like a cheetah on caffeine. In the last 30 days, STHs have realized a staggering $11.4 billion in profit, with a daily peak of $747 million. A far cry from the $1.2 billion in cumulative profit realized in the previous 30-day period—talk about a profit party!
Moreover, the surge in profit-taking is glaringly evident in the STH Realized Profit/Loss Ratio, which has soared to heights only seen on 8% of trading days in Bitcoin’s storied history. Truly, a moment to savor!
“This dramatic shift highlights just how quickly investor sentiment and behavior can pivot when momentum returns. However, it also implies that some degree of consolidation is likely as the market digests this wave of distribution before attempting another leg higher,” the wise analysts at Bitfinex proclaimed, as if they were prophets of the digital age.
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2025-05-27 13:34