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Bitcoin’s price has staged a steady recovery in recent sessions, extending gains that now place BTC near a potential breakout zone. The ongoing rise has shifted market tone toward cautious optimism.
However, as bullish momentum builds, rising short-term holder profits introduce a familiar risk that could challenge Bitcoin’s advance.
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Some Bitcoin Holders Exit, Others Buy The Dip
Bitcoin recently surged to a two-month high near $97,500, marking its strongest level since early November. This rebound unfolded despite a notable contraction in retail participation. Over the past three days, on-chain data shows a decline in Bitcoin holders, suggesting smaller investors exited.
“there is a net drop of -47,244 holders, indicating that retail had been dropping out due to FUD & impatience,” highlighted Santiment.
At the same time, exchange balances have dropped to a seven-month low of roughly 1.18 million BTC. Reduced exchange supply often signals lower immediate selling pressure.
This is the third instance in three months where falling exchange balances have coincided with price stabilization. Together, these signals are strengthening confidence that Bitcoin may be forming another local bottom.
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Macro indicators add nuance to the recovery narrative. The Market Value to Realized Value Long/Short Difference shows short-term holders regaining profitability dominance over long-term holders. Recent accumulation, paired with rising prices, has pushed short-term holder profits to their highest levels since January 2023.
Historically, elevated short-term profitability can be a double-edged signal. While it reflects improving demand and price strength, short-term holders are more prone to selling. So far, there is no clear evidence of aggressive distribution. Still, sustained gains could tempt these holders to lock in profits, potentially slowing Bitcoin’s recovery.
BTC Price Has Breakout In Sights
Bitcoin is trading near $95,372 at the time of writing, moving within an ascending broadening wedge. This structure often carries bullish implications if the price breaks higher and holds. A confirmed breakout would require Bitcoin to reclaim $98,000 and successfully retest it as support.
If current conditions persist, the apparent bottom formation could support another leg higher. Holding above the $95,000 psychological level remains critical. A successful defense of this zone would likely encourage buyers to challenge $98,000 again. Flipping that level into support would open the path toward the $100,000 psychological milestone.
A bearish alternative remains plausible. Should bullish momentum fade and short-term holders begin booking profits, Bitcoin could lose the $95,000 support. Such a move would likely send BTC toward $93,471 or lower. A breakdown below that zone would invalidate the bullish thesis and delay any breakout attempts.