Since the beginning of 2025, Bitcoin [BTC] has displayed notable resilience, reattaining levels above $99k. During this timeframe, BTC has surged from $92,768 to $99,857.
Despite the recent price surge, concerns have been raised by analysts regarding the current market conditions of BTC. Notably, analysts from CryptoQuant have hinted at a probable correction due to diminishing profitability among short-term holders.
Diminishing profitability among short-term holders of Bitcoin
Analyst Crazzy Block noted a decrease in profitability among Bitcoin’s short-term holders.
The inability to reclaim BTC’s all-time high (ATH) of $108k subsequently led to a significant drop in profitability for short-term holders.
When the profitability for short-term holders declines, this indicates a weakening in market demand and an increase in bearish sentiment over the short and medium term.
A decrease in demand like this suggests a higher probability of a price correction. Thus, short-term corrections are likely while Bitcoin continues to hold potential for long-term growth.
Impact on Bitcoin charts?
Even though short-term holder profitability has decreased while Bitcoin trades below $100k, the market appears poised for further gains in the near future.
Therefore, other market indicators imply that bulls are striving to push prices upwards and a substantial market correction seems improbable, especially in the short term.
For instance, Bitcoin’s Taker buy-sell ratio has surged in the last 48 hours, reaching 1.121. A ratio above 1 indicates aggressive buying activity for BTC, with buyers surpassing sellers.
This surge reflects a bullish sentiment as there is short-term momentum towards an upward trend, with buyers dominating the market.
Furthermore, Bitcoin’s Funding Rate has escalated from 0.0084 to 0.0124 within the past day. A rising Funding Rate signals an increase in bullish traders opening long positions.
The demand for long positions showcases market confidence with investors expecting Bitcoin’s price to appreciate.
Lastly, Bitcoin’s Exchange supply ratio has dropped to a yearly low.
A decline in supply to exchanges suggests that investors are accumulating BTC by transferring to private wallets, anticipating further price increments.
In essence, despite the decline in short-term holder profitability, the market appears robust, particularly in the short term.
Thus, this diminished profitability has not yet foretold a short-term market correction as investors remain optimistic.
With bullish sentiment prevailing and buyers reestablishing dominance, there is a potential for BTC to reclaim $100k and rise to $102,777.
However, in the event of an expected correction, Bitcoin could retreat to $95,000.