Bitcoin's recent rally, which saw it surge nearly 50% from its year-to-date low of $73,273 on April 9th to $107,380, may be losing steam. According to Bitfinex analysts, the cryptocurrency's "vertical acceleration" is "off the table for now" as buying pressure weakens and traders begin to take profits.
In a market report released on Monday, Bitfinex analysts stated that Bitcoin's momentum has begun to fade for the first time during the uptrend. Order flow data and on-chain metrics suggest that Bitcoin may be entering a period of consolidation or reaching a local top, rather than continuing its rapid ascent. Spot volume has decreased, taker buy pressure has weakened, and profit-taking has increased, especially among short-term holders who profited from the move from below $80,000.
Bitcoin continues to trade within a range of $100,000 to $110,000, showing signs of consolidation after its significant rally from the April low. This compression in price action reflects a cooling in on-chain and derivatives activity, with declining spot volumes and a drop in open interest. This indicates a shift from aggressive impulse to a ranging phase.
Analysts suggest that Bitcoin's next move will depend on macroeconomic factors and continued institutional demand, particularly from ETF inflows. US-based spot Bitcoin ETFs have experienced inflows for 14 consecutive trading days since June 9th, with net inflows totaling $4.63 billion as of June 27th. Economist Timothy Peterson described last week's $2.2 billion inflows as "massive" and anticipates the streak will continue, which generally correlates with upward price pressure.
Traders are also closely watching the Federal Reserve's July 30th interest rate decision, as lower rates are typically bullish for crypto. The market currently estimates a 19% chance of a rate cut at that meeting, according to the CME FedWatch tool.
Despite the short-term uncertainty, analysts believe the broader market structure remains strong, with higher time frame support levels still holding. If Bitcoin can maintain the $102,000-$103,000 support zone, it could signal a local bottom has formed and the market is stabilizing.
Historically, the third quarter has been the weakest for Bitcoin, with an average performance of 6.03% since 2013. This is also when average volatility is subdued, adding to the likelihood of range-bound price action continuing. Bitcoin has historically produced an average return of 27.12% in the second quarter since 2013, with the second quarterly close typically marking the start of "summer seasonality," leading to less volatile and range-bound price action. This effect has become more prominent in recent years as market participants have matured and there has been increased correlation to traditional finance assets.
A brief drop to $99,830 last week triggered significant liquidations on both long and short positions, with futures open interest levels dropping over 7% in a 24-hour window. This has cleared excess leverage and reset market positioning heading into the quarterly close.
While the possibility of "vertical acceleration" may be off the table for now, the broader market structure remains healthy. The focus shifts to macroeconomic factors, institutional demand, and the ability of Bitcoin to hold key support levels.
