The Bitcoin rally, which has lifted prices more than 40% since early April, may be running out of steam as analysts flag weakening momentum and rising profit-taking.
Key Takeaways:
Bitcoin’s rally momentum is fading as traders who bought below $80,000 take profits.
Analysts say Bitcoin’s next move will depend on macro factors like Fed rate decisions.
Despite short-term uncertainty, key support levels remain strong, and some experts see potential for a breakout.
Bitfinex market strategists said Monday that for the first time during the recent uptrend, “momentum has begun to fade,” citing cooling spot volumes and a slowdown in taker buy pressure.
The price of Bitcoin rose from $73,273 on April 9 to $107,380 at publication, but signs now point to possible consolidation or a local top rather than continued explosive gains.
Profit-Taking Heats Up as Sub-$80K Bitcoin Buyers Cash Out
Traders taking profits, particularly those who bought under $80,000, have intensified selling pressure, according to the analysts.
They noted that Bitcoin’s next significant move hinges on macroeconomic drivers and institutional appetite, especially inflows into US-based spot Bitcoin ETFs.
These ETFs have attracted net inflows of $4.63 billion over 14 straight trading sessions since June 9, with economist Timothy Peterson calling last week’s $2.2 billion in inflows “massive” and projecting a 70% chance of continued positive flows this week.
Attention is also turning to the Federal Reserve’s July 30 meeting, where markets currently assign a 19% chance of an interest rate cut, based on CME FedWatch data.
Lower rates tend to be bullish for risk assets like Bitcoin, adding further weight to the Fed’s decision for short-term price direction.
Despite near-term caution, analysts stressed that Bitcoin’s higher time frame structure remains intact, with key support levels holding firm.
Meanwhile, some remain optimistic. For one, economist Donald Dean suggested Bitcoin is primed for a breakout following tight consolidation near recent highs.
Likewise, Capriole Investments founder Charles Edwards argued that selling by long-term holders has been a key factor suppressing prices, even as institutional interest surged after the launch of spot ETFs earlier this year.
Bitcoin Adoption as Treasury Asset Finds Momentum
As reported, over the past week, at least nine UK firms, from web design startups to mining businesses, have announced plans to buy Bitcoin or revealed recent purchases to add the cryptocurrency to their corporate treasuries.
Among the UK firms, AI services provider Tao Alpha disclosed plans to raise £100 million after revealing a bitcoin treasury plan that triggered investor interest.
Smarter Web Company, a small website design firm, saw its market value rocket from £4 million to over £1 billion in just two months after announcing its Bitcoin purchases in April, although shares have since cooled.
In the US, Anthony Pompliano’s ProCap BTC acquired 3,724 Bitcoin for $386 million as part of plans to go public through an SPAC merger, while Japan’s Metaplanet raised $517.8 million on the first day of its ambitious “555 Million Plan,” which targets 210,000 Bitcoin by 2027.
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