Bitcoin’s move to a one-month high of $74,000 this week sparked a wave of profit-taking by short-term traders, according to data from CryptoQuant.
The major cryptocurrency is trading around $69,000 after losing momentum from Wednesday’s break above $70,000.
CryptoQuant analyst Darkfost explains that short-term holders have transferred more than 27,000 BTC ($1.8 billion) to exchanges in profit over the past 24 hours – one of the biggest increases in recent months.
The only short-term investors currently in profit are those who accumulated bitcoin between a week and a month ago, with a realized price of around $68,000, suggesting that some recent buyers are choosing to lock in gains rather than expand their positions.
Short-term holders are typically the most reactive group in the market, and their selling reflects continued caution in light of the ongoing war in Iran.
CoinDesk analysis on Wednesday identified a potential bull trap as price action mirrored that in January, when the price broke out at $98,000 before taking a leg lower.
And the lower leg happened on Friday, precipitated by comments from US President Donald Trump demanding Iran’s unconditional surrender – a move that also sent oil prices higher.
Despite the profit-taking, broader factors are helping support bitcoin’s rally, according to Adrian Fritz, chief investment strategist at 21Shares.
Fritz said traders are increasingly betting that the Clarity Act, a bill to structure the U.S. digital asset market, could be passed by the end of the year. Prediction markets currently price the probability at around 70%, although Fritz noted that these markets are relatively illiquid.
He also pointed to rising geopolitical tensions and strong institutional demand as key drivers.
Some investors increasingly view bitcoin as a “gold beta” trade, rotating into the asset following gold’s recent rally. Meanwhile, spot bitcoin ETFs have shown resilience, with holdings down only about 5% during the recent pullback and over $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.
