Key Points
- Bitcoin’s short-term holders are experiencing declining profitability, potentially signaling price corrections.
- Despite this, other market indicators suggest bullish sentiments with potential for price growth.
Bitcoin [BTC] has demonstrated remarkable resilience since the beginning of 2025, successfully reclaiming the $99k mark. The cryptocurrency has seen a significant surge from $92768 to $99857 over this period.
However, despite this upsurge, some analysts have expressed concerns about the current market conditions surrounding Bitcoin. CryptoQuant analysts, for instance, have predicted a potential correction due to the declining profitability among short-term holders of Bitcoin.
The Decline in Short-term Holders’ Profitability
Bitcoin’s short-term holders have been experiencing a drop in their profitability. This decline was triggered by the failure to reclaim Bitcoin’s $108K all-time high (ATH), leading to a significant drop in the profitability margin for short-term holders (STHs).
A decrease in profitability for STHs often indicates a weakening market demand and a rise in bearish sentiments over the short and medium term. This drop in demand suggests an increased likelihood of price correction. Therefore, short-term corrections may be inevitable, even though Bitcoin has immense potential for long-term growth.
The Impact on Bitcoin’s Charts
Even with the reduced profitability for short-term holders and Bitcoin trading below $100k, the market seems to be poised for more short-term gains. Other market indicators suggest that bulls are working to drive prices up, and a significant market correction seems unlikely, especially in the near term.
For instance, Bitcoin’s Taker buy-sell ratio has seen a surge over the past 48 hours, reaching 1.121. A ratio above 1 implies that Bitcoin is experiencing aggressive buying activities, with buyers outnumbering sellers. This suggests a bullish sentiment and short-term momentum towards the upside, with buyers dominating the market.
Additionally, Bitcoin’s Funding Rate has increased over the past day from 0.0084 to 0.0124. A rise in the Funding Rate signifies that more traders are bullish and are opening long positions. This demand for long positions reflects market confidence, with investors expecting BTC prices to increase.
Finally, Bitcoin’s Exchange supply ratio has dipped to a yearly low. A decrease in supply to exchanges implies that investors are accumulating Bitcoin by transferring it to private wallets, in anticipation of further price increases.
In summary, even though the profitability of short-term holders has declined, the market still appears strong, particularly in the short term. Therefore, this reduced profitability has yet to signal a short-term market correction as investors remain bullish.
With bullish sentiments still dominant in the market and buyers regaining control, it is possible that Bitcoin could reclaim the $100k mark and surge to $102,777. However, if the anticipated correction occurs, Bitcoin may drop to $95000.