Bitcoin fell back below $80,000 on Wednesday after a brief breakout attempt as onchain data suggested the rally was already running into a profit squeeze.
CryptoQuant said bitcoin’s 37% rebound from its April low still looks more like a bear market rally than a confirmed trend reversal, with realized profits hitting their highest level since December and short-term holders increasingly exiting with a profit.
Bitcoin’s rally has pushed traders back into profit, with holders cashing out at the fastest pace since December as recent buyers increasingly sell for strength, they wrote.
But the rally still looks more like a relief rally than a true bull-market breakout, as profits remain well below levels seen in previous sustained uptrends, while unrealized gains are already high enough to tempt more selling, according to CryptoQuant. Traders are also sitting on an unrealized profit margin of 18%, the highest since June 2025, a level where profit-taking has historically accelerated.
Singapore-based market maker Enflux offered a different reading, focusing less on holder behavior and more on the macro catalyst that drove bitcoin’s initial move higher.
Enflux said bitcoin’s push through the $80,000 level was part of a broader risk response after President Donald Trump paused a US naval operation tied to tensions around the Strait of Hormuz, a move that sent oil prices lower and lifted stocks.
But while Enflux said the rally “makes sense mechanically,” it warned that markets may be overestimating the durability of the catalyst, noting that previous Trump diplomatic pauses since March either reversed within days or were misread by traders.
However, Glassnode offered a more constructive view, arguing that bitcoin’s recent moves reflect an early structural recovery rather than just a short-lived macro bounce.
The research firm said bitcoin had regained two closely watched levels on the chain in a note this week: the Sand Market Mean at $78,200 and the short-term holder cost basis near $79,100, levels that often serve as dividing lines between weaker and stronger market regimes.
Glassnode identified around $85,200 as the next major resistance zone, while pointing to an improvement in US spot ETF inflows and persistent negative perpetual funding, a sign that some traders remain positioned for the downside even as prices recover.
Still, Glassnode stopped short of declaring a clean outbreak.
Long-term holders have started to realize profits, while elevated realized losses across the broader market suggest that bitcoin still needs stronger spot demand to sustain a more sustainable move higher.
The prediction markets reflected similar caution. At Polymarket, traders assigned relatively low odds to bitcoin stretching cleanly towards $85,000 or more this week, suggesting the market remains hesitant to treat the latest rally as a confirmed breakout.
