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Bitcoin profit taking has reached a 7-month high. The once-bullish sentiment is fading fast.
Traders are intensifying Bitcoin profit taking moves, triggering speculation of a deeper correction. With Bitcoin profit taking accelerating, BTC’s momentum is clearly under siege.
After a promising rally that brought BTC within striking distance of its all-time high, momentum seems to have cooled quite fast.
In the first week of July, Bitcoin soared near $120,000, drawing in traders anticipating a breakout.
But instead of smashing through resistance, BTC has entered a sideways grind. The cause? A notable uptick in Bitcoin profit taking, as investors rush to secure gains from the recent rally.
Bitcoin profit taking has surged sharply, with on-chain data from Glassnode confirming that realized profits are at their highest level since December.
This trend points to widespread sell-offs by investors looking to cash out while prices are still favorable.
“Profit realization is often a sign of weakening bullish conviction,” said James Butterfill, Head of Research at CoinShares. “When holders begin offloading at peak levels, it signals uncertainty in the next leg up.”
The market sentiment reflects this. As profit taking accelerates, investors are shifting capital into altcoins, hoping for better short-term performance. This rotation is placing additional downward pressure on BTC’s price.
While Bitcoin profit taking is gaining pace, another metric is flashing mixed signals — velocity. This indicator, which measures the frequency of Bitcoin transfers across the blockchain, has jumped to a 4-month high.
Higher velocity generally indicates that BTC is changing hands quickly, often associated with short-term speculationrather than long-term holding.
It adds to the evidence that traders are aiming to capitalize on intraday volatility rather than ride out another bull run.
“This tug-of-war between profit takers and short-term speculators is keeping Bitcoin locked in a narrow range,” noted Harsh Notariya, crypto analyst and editor of the Daily Crypto Newsletter.
Currently, Bitcoin is trading around $119,366, unable to convincingly breach the $120,000 resistance.
Technical indicators suggest continued consolidation between $117,000 and $120,000 in the absence of strong buying interest.
However, should Bitcoin profit taking intensify further, BTC could face a sharper downturn. A breakdown below $115,000 could open the door to $110,000 — erasing much of the June rally’s gains.
“Profit taking is not inherently negative,” explained Katie Stockton, Managing Partner at Fairlead Strategies. “But when it becomes the dominant behavior, the market typically loses its bullish momentum.”
Adding to Bitcoin’s woes is its slipping market dominance. With investors chasing high-beta plays in Ethereum, Solana, and memecoins like PEPE, BTC is no longer the only game in town.
This capital rotation is sapping strength from Bitcoin’s rally and accelerating Bitcoin profit taking.
According to CoinMarketCap, BTC dominance has dropped to 47.8%, its lowest level in over two months.
“The current environment shows clear signs of sector rotation,” said Matthew Sigel, Head of Digital Assets Research at VanEck. “Investors are trimming Bitcoin exposure and reallocating to altcoins in hopes of better short-term gains.”
The next few days will be critical for Bitcoin. If demand fails to return and Bitcoin profit taking continues at this pace, the market may tip into a corrective phase.
Still, hope remains among long-term holders that any dip below $115,000 would be seen as a buy-the-dip opportunity. But for now, Bitcoin bulls are facing a stiff headwind from profit takers and macro uncertainty.
Until then, traders should watch key support and resistance levels — and brace for heightened volatility.
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