Bitcoin price closed last week with a slight gain, breaking a streak of bearish weeks after facing early pressure from market uncertainty. While demand has shown signs of returning after recent tariff wars pause, the market still presents some volatility.
Despite an initial downward trend on Sunday, Bitcoin’s weekly performance saw a 2.29% increase, ending the week with a new all-time high above $4,500. This positive movement was largely attributed to bullish sentiment fueled by DeFi expansion and increasing institutional investments. However, a significant drop of around 1.79% from opening price on Sunday has triggered potential short-term profit-taking.
The market’s uncertainty is further highlighted by the fear and greed index hovering at 45, remaining in the fear territory. While there are signs of cautious optimism, potential for short-term gains could lead to selling pressure.
Analysis from CryptoQuant analyst Darkfost provides insights into Bitcoin’s potential movement this week. Notably, his observation suggests that despite recent volatility, whale activity remains positive. The 365-day moving average continues to rise, indicating a longer term bullish trend. Additionally, short-term whale activity has declined according to the 30-day moving average, dropping to levels last observed in September and October of 2021.
Further observations from Binance whale activity reveal similar trends: exchange inflows from whales have cooled down significantly, aligning with Darkfost’s findings. The short-term market correction may be a sign of profit-taking from recent bullish gains.
Market sentiment is also being influenced by the fear and greed index, which recently reached 45, indicating slight recovery but still remaining in fear territory. Although smart money activity showed a strong spike between Wednesday and Friday, followed by a decrease on Saturday, potentially signaling short-term trading patterns.
Bitcoin’s long-term trends remain positive, with large holder netflows (1 year plus) holding steady at 12.37 million BTC, nearly mirroring the level observed in early April. Cruiser balances dipped slightly, while trader balances saw a slight increase, indicating potential for short-term trading.
In the face of uncertainty, Bitcoin’s dominance continues to rise, signifying an increasing need for liquidity inflows. The combination of these factors suggests that while short-term profit-taking may influence price movement, long-term investors remain optimistic about Bitcoin’s continued growth.