Bitcoin’s move to a one-month high of $74,000 this week triggered a wave of profit-taking from short-term traders, according to data from CryptoQuant.
The largest cryptocurrency is trading around $69,000 after losing momentum from Wednesday’s break above $70,000.
CryptoQuant analyst Darkfost explains that short-term holders transferred more than 27,000 BTC ($1.8 billion) to exchanges in profit over the past 24 hours — one of the largest spikes in recent months.
The only short-term investors currently in profit are those who accumulated bitcoin between one week and one month ago, with a realized price of roughly $68,000, suggesting some recent buyers are choosing to lock in gains rather than extend their positions.
Short-term holders are typically the most reactive group in the market, and their selling reflects lingering caution in light of the ongoing war in Iran.
CoinDesk analysis on Wednesday identified a potential bull trap as price action mirrored that in January when price broke out to $98,000 before taking a leg lower.
And that leg lower occurred on Friday, accelerated by comments from U.S. president Donald Trump who demanded that Iran unconditionally surrenders – a move that also sent the price of oil soaring.
Despite the profit-taking, broader factors are helping support bitcoin’s rally according to Adrian Fritz, chief investment strategist at 21Shares.
Fritz said traders are increasingly betting that the Clarity Act, a U.S. digital asset market structure bill, could pass by year-end. Prediction markets currently price the probability at around 70%, though Fritz noted these markets are relatively illiquid.
He also pointed to rising geopolitical tensions and strong institutional demand as key drivers.
Some investors are increasingly viewing bitcoin as a “gold beta” trade, rotating into the asset after gold’s recent rally. Meanwhile, spot bitcoin ETFs have shown resilience, with holdings down only about 5% during the recent pullback and over $700 million in net inflows this week.
While political developments may have helped spark the move, Fritz said the rally is being sustained by geopolitical hedging and growing institutional conviction in the asset.