Bitcoin’s surge to a one-month high near $74,000 earlier this week prompted a significant round of profit-taking from short-term traders, according to on-chain data from CryptoQuant.
After briefly reclaiming the $70,000 level on Wednesday, the rally lost steam, with the leading cryptocurrency slipping back to around $69,000.
CryptoQuant analyst Darkfost said short-term holders moved more than 27,000 BTC — roughly $1.8 billion — to exchanges at a profit over the past 24 hours. The spike represents one of the largest bursts of realized gains recorded in recent months.
At present, only investors who accumulated Bitcoin between one week and one month ago remain in profit among short-term holders. Their average realized price is estimated to be around $68,000, indicating that some recent buyers chose to lock in gains instead of holding for further upside.
Short-term holders are typically the most reactive participants in the market, and their selling suggests lingering caution as geopolitical tensions involving Iran continue to weigh on sentiment.
Earlier this week, analysis from CoinDesk highlighted the possibility of a bull trap, noting similarities with January’s market behavior when bitcoin briefly surged to $98,000 before reversing lower.
That downward move materialized on Friday and was amplified by remarks from Donald Trump demanding Iran’s unconditional surrender — comments that also helped send oil prices sharply higher.
Despite the latest wave of profit-taking, broader factors continue to support bitcoin’s advance, according to Adrian Fritz, chief investment strategist at 21Shares.
Fritz said traders are increasingly wagering that the Clarity Act, a proposed U.S. digital-asset market structure bill, could be approved before the end of the year. Prediction markets currently assign roughly a 70% chance of passage, though Fritz noted those markets remain relatively illiquid.
He also pointed to mounting geopolitical tensions and steady institutional demand as key drivers underpinning the market.
Some investors are beginning to treat bitcoin as a “gold beta” trade, rotating into the asset after the recent rally in Gold. Meanwhile, spot bitcoin exchange-traded funds have held up relatively well, with holdings declining only about 5% during the recent pullback while still recording more than $700 million in net inflows this week.
According to Fritz, while political developments may have sparked the move initially, the rally is increasingly being sustained by geopolitical hedging and growing institutional conviction in bitcoin.
