Bitcoin Drops 4% After Reaching $123,000 High, Traders Take Profits

Bitcoin recently reached an unprecedented high of $123,000, but the market has since cooled as traders and short-term holders began to take profits. This shift is evident in the increased inflows to centralized exchanges, indicating that many investors are securing their gains after the latest rally. This behavior is typical following sharp upward movements, as investors move funds onto exchanges to lock in profits, often signaling a temporary local top. The market typically enters a phase of correction or sideways consolidation afterward as new support levels are tested.

Despite the near-term cooling, the broader sentiment in the Bitcoin market remains constructive. Long-term holders have not initiated any large-scale sell-offs, and their wallets remain relatively dormant, showing continued confidence in the asset. Additionally, no meaningful outflows have been recorded from major institutional wallets, which often reflect the broader investment horizon. Their steady position signals underlying bullish conviction and reduces the chances of a broader market sell-off. ETF-related demand also continues to provide positive support, with consistent inflows into Bitcoin ETFs suggesting ongoing interest from traditional finance, which helps balance out the current round of retail profit-taking.

The current market behavior is not uncommon following strong rallies. This movement typically suggests a local top and could lead to a healthy correction or consolidation. As short-term traders cash out, the market’s condition does not signify panic, nor does it indicate a longer-term reversal. The macro landscape and on-chain signals will continue to embrace the bull cycle. It seems we can now expect the market to settle before moving on to its next move.

Miner behavior also supports the view that the current move is likely a temporary correction. When miners reduce activity or hold on to their coins, it is often seen as a sign that they expect prices to rise further. With the cost of mining now lower than current market prices, miners may feel no pressure to sell, which helps reduce overall selling pressure. Since miner selling is frequently interpreted by on-chain investors as a bearish signal, their choice to hold is seen as supportive of the current trend.

As of the latest data, Bitcoin is down roughly 4% over the last day, trading at $117,153. This drop follows a strong multi-day rally that saw prices rise from below $110,000 just a week earlier to a new high. From a technical perspective, Bitcoin is still in an uptrend but is now beginning to cool down. The price was rejected at the upper Bollinger Band, and the relative strength index has eased to 65 after reaching overbought levels close to 79. If selling persists, Bitcoin may retreat toward the $111,000-113,000 support zone, which corresponds to the mid-Bollinger Band. However, if buyers step in, the market might attempt another rally toward $123,000. The trend is still upward for the time being, but many traders are keeping a close eye out for indications of a deeper correction or new momentum.