Bitcoin News Today: Bitcoin Faces Short-Term Volatility After 19% Rally

Bitcoin has recently shown signs of potential short-term exhaustion, forming a bearish engulfing candle on its daily chart. This pattern, confirmed by a shooting star, follows a 19% rally over the past 21 days, suggesting that the market may be due for a pause or correction. The Miners’ Position Index (MPI) has surged to its highest level since November 2024, indicating that miners are sending more Bitcoin to exchanges relative to the one-year average. This increase in selling pressure could add short-term volatility, but it remains below levels typically seen near bull market tops.

Despite the bearish signals, there are indications of strong long-term bullish sentiment. Over 196,600 BTC, worth more than $23 billion, was accumulated in the $116,000–$118,000 range. This substantial dip-buying suggests that investors remain confident in Bitcoin’s longer-term trajectory. Additionally, the realized profit and loss from BTC deposits to centralized exchanges hit an all-time high of $9.29 billion, signaling aggressive profit-taking. This metric points to a high-risk zone where short-term volatility may intensify, but the broader bullish trend remains intact.

Trading platform noted that Bitcoin open interest is approaching frothy levels. Historically, when open interest is high and the Fear & Greed Index is in "Extreme Greed" territories, local tops and corrections occur. These conditions typically play out over longer timeframes, suggesting that investors should not rush into trades based on short-term signals. The recent dip in Bitcoin triggered panic selling, with nearly 50,000 BTC offloaded at a loss within 24 hours. However, this reaction underscored investor anxiety following BTC’s decline from recent highs, rather than a fundamental shift in market sentiment.

From a technical perspective, Bitcoin remains within its bullish long-term structure as long as it consolidates above the $112,000 level. A period of sideways movement or a minor pullback is a healthy reset, allowing the market to cool off, flush out excess leverage, and shake out weaker hands. While the recent bearish engulfing pattern may signal short-term exhaustion or a potential reversal, it does not yet invalidate the broader uptrend. As long as key support levels hold around $112,000, the probability of BTC resuming its upward momentum remains high.