Bitcoin is currently consolidating after climbing to $111,880 last week, based on a May 26 Bitfinex Alpha report. Some strong demand at spot exchanges and stable inflows into ETFs sent Bitcoin 50% higher from its lows in early April, until President Trump’s tariff threats on the EU made investors move into safer assets.
The Impact of Tariff Shock
With a big negative shock and high debt among futures traders, Bitcoin dropped below $107,000 in just 36 hours. Yet, the pullback was needed because during the downturn, futures funding turned negative. This suggests traders cut their bets rapidly and forced sellers got out of their positions.
Profit-Taking Creates Supply Pressure
The recent increase in ETH is mainly because dip buyers want to lock in their profits and addresses that lost during the dip can now exit by breaking even. The added activities led to a surplus of supplies which could hold back price increases if new purchases do not increase. The data from exchange shows smaller overall buying, along with perpetual basis rates that are not moving significantly.
Traders who own cryptos for a few days
Recent on-chain information shows that when short-term holders’ cost basis reached $95,164, a quick selloff took place once the price hit that amount again. The most recent 30 days showed $11.4 billion in profit from short-term holders, compared to a $1.2Bin the weeks before. On only 8 percent of all Bitcoin trading days did the daily profit exceed $747 million.
What can we expect for the trading range?
The report anticipates Bitcoin will move between $106,000 and $111,000 until new buyers soak up the extra sellers. Seven straight weekly green candles are the longest streak since October 2023, but big moves like this usually begin Slowly.
The Healthy Consolidation Phase
Even with Bitcoin under pressure and not knowing the effect of tariffs, the market currently looks healthy. This is often followed by price rises, provided that institutions and the overall economy are clearer on their direction.
