Bitcoin Drops 3.10% as Profit-Taking Weighs on Momentum

Bitcoin investors are increasingly taking profits as the leading cryptocurrency pauses its upward trajectory, currently hovering slightly above the $100,000 mark. On-chain market analytics firm Glassnode warned of growing consolidation risks facing Bitcoin. The world’s largest cryptocurrency by market capitalization has recently led a massive bull run across the crypto market, rising from a low of $93,000 to over $105,000 within the last seven days. Although this impressive rally sparked a wave of new demand, analysts now say Bitcoin’s momentum is weakening.

While the broader crypto market remains in a bullish phase, major cryptocurrencies have slowed their recent uptrend. Analysts attribute this to market sentiment shifting toward riskier levels. Bitcoin has retraced into the red over the past 24 hours, dropping by 3.10%. As of press time, Bitcoin is trading at $101,266.49, shedding some of its previous gains. This price correction is largely due to increased profit-taking from existing holders and the inactivity of momentum buyers, who typically drive sustained price surges in crypto assets.

With momentum gradually weakening, strong selling pressure from profit-takers has outpaced the influence of new entrants in the market. As a result, Bitcoin has retraced back to nearly $100,000. Although demand from first-time buyers remains robust, the asset’s short- to mid-term outlook remains uncertain. Its upward momentum has been hindered by low activity from momentum buyers, with Bitcoin’s momentum RSI currently at around 11, signaling a weak trend. While there are no clear signals indicating the end of the current bull run, Bitcoin may face a period of consolidation as it struggles to sustain its rally in the face of persistent profit-taking.

However, Bitcoin’s First-Time Buyer RSI has remained at 100 all week, indicating continued interest from new market entrants. There is growing speculation that the bull run may resume soon, especially as institutional investors appear to be continuing their accumulation strategies. Bitcoin's recent price surge has been marked by significant first-time buyer activity, driving the cryptocurrency to new heights. However, analysts warn that without sustained capital inflows, the current momentum could lead to a period of consolidation. The profit-taking activity observed in the market suggests that Bitcoin's price may stabilize or even correct in the near term. This consolidation phase is a common occurrence in the cryptocurrency market, where periods of rapid growth are often followed by periods of price stabilization.

The dominance of Bitcoin in the overall cryptocurrency market has been increasing, indicating a shift of funds from alternative coins to Bitcoin. This trend is typically seen as a precursor to either a consolidation phase or a breakout to new highs. The recent surge in Bitcoin's price, which crossed the $100,000 mark for the first time in months, has been driven by strong spot buying and increased order book liquidity. This bullish momentum has been supported by technical signals that suggest a potential new all-time high. Despite the positive outlook, there are concerns about the sustainability of Bitcoin's surge past the $100,000 level. The significant supply zone between $0.81 and $0.84 poses a risk of continued price consolidation under $0.81. If the resistance proves too strong, Bitcoin may face challenges in maintaining its upward trajectory. The recent crash from the all-time high of $108,786 in January serves as a reminder of the volatility inherent in the cryptocurrency market.

The influx of new buyers into the Bitcoin market has been a driving force behind its recent price surge. However, the lack of sustained capital inflows could lead to a period of consolidation, where the price stabilizes or corrects. This consolidation phase is a natural part of the market cycle and is often followed by a renewed period of growth. The increasing dominance of Bitcoin in the overall cryptocurrency market suggests that funds are shifting from alternative coins to Bitcoin, which is a common precursor to either consolidation or a breakout to new highs. The recent price surge has been driven by strong spot buying and increased order book liquidity, which has supported Bitcoin's breakout through the $100,000 level. However, the sustainability of this surge remains a concern, as the significant supply zone between $0.81 and $0.84 poses a risk of continued price consolidation under $0.81. If the resistance proves too strong, Bitcoin may face challenges in maintaining its upward trajectory. The recent crash from the all-time high of $108,786 in January serves as a reminder of the volatility inherent in the cryptocurrency market.