Bitcoin has surged to new psychological highs, recently touching $95,768**, fueled in part by shifting global trade dynamics and renewed investor optimism. While the momentum is undeniable, on-chain data and key market indicators suggest a **short-term correction may be imminent**. The critical support zone lies above **$70,000—a level that could determine whether the current rally extends into a full-blown bull run or gives way to prolonged consolidation.
This article dives deep into the current state of Bitcoin’s market structure, analyzing ETF flows, on-chain behavior, momentum metrics, and macroeconomic tailwinds shaping its long-term trajectory.
Momentum Indicators Signal Caution
After briefly entering a “death cross” on April 7, Bitcoin has now reclaimed all major moving averages—a bullish technical development. However, such breakouts don’t guarantee sustained upward momentum. Historically, these phases are often followed by profit-taking and pullbacks.
Analysts at The Defi Report suggest Bitcoin is likely due for a correction. If the dip holds above $76,000**, it may form a higher low, reinforcing bullish structure. But should price fall below that level, the next major support zone sits firmly **above $70,000.
"A break below $70,000 would confirm Bitcoin remains in a left-side cycle with sustained downward pressure," the report notes.
Conversely, if Bitcoin stabilizes above $95,000, it could break into uncharted territory and set a new all-time high—potentially unlocking accelerated institutional demand.
ETF Inflows: A Game-Changer?
One of the most significant developments in April was the $15.4 billion net inflow** into Bitcoin spot ETFs on April 22—the largest single-day inflow since President Trump took office. This reversal comes after **$38 billion in net outflows during February and March, followed by another $6 billion outflow in the first three weeks of April.
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This sudden shift underscores growing institutional appetite—but sustainability remains key. Without consistent U.S. market participation and ETF inflows, analysts argue Bitcoin may struggle to reclaim and sustain record highs.
On-Chain Activity: Signs of Profit-Taking
Despite strong price action, on-chain data reveals growing signs of distribution:
- Daily trading volume averaged $8.7 billion in April—comparable to early 2023 bullish levels.
- A spike to $13 billion occurred on April 22, yet still below peak volatility thresholds.
- Meanwhile, active addresses dropped 22% compared to November–December 2024 highs.
More tellingly, short-term holders (STHs) have begun offloading BTC. Price recently touched the STH cost basis at $92,500, a known resistance-turned-support level. When this threshold is breached, it often triggers wave-like selling from speculative investors.
Since early February, STHs have reduced their holdings by 11.4%. On April 22–23 alone, over $4.4 billion worth of BTC was transferred to exchanges—an unmistakable signal of profit-taking. This pattern mirrors early bearish phases in 2022 when short-term holders sold into strength before a prolonged downturn.
Long-Term Holders Step In
In contrast to short-term weakness, long-term holders (LTHs) are accumulating aggressively. They now control 69% of Bitcoin’s circulating supply, up from 66% on February 1, 2025.
Historical context shows this accumulation phase often precedes major rallies:
- 2017 bull peak: LTHs held 51.6%
- 2018 bear bottom: 67.3%
- 2021 bull peak: 69%
- 2022 bear bottom: 69.5%
This rising concentration suggests strong conviction among core holders who view current prices as favorable entry points.
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Moreover, the LTH-to-STH supply ratio has bottomed following price peaks in late 2024 and early 2025—a typical sign of cyclical topping. However, history shows Bitcoin can form "double tops," as seen in 2021 when LTH-driven accumulation led to a second peak months later.
If this pattern repeats, the next major target could range between $110,000 and $130,000.
Stablecoin Supply Growth Stalls
Stablecoins often act as dry powder for the next leg up in crypto markets. Yet USDT’s supply has remained stagnant near $140 billion since mid-December 2024—raising concerns about limited liquidity for further upside.
Meanwhile, USDC supply has grown 47% over the same period, echoing trends seen during past bear markets when regulated stablecoins gained favor before broader recovery.
This stagnation correlates with periods of price consolidation or sideways movement, suggesting Bitcoin may face resistance absent fresh stablecoin issuance.
MVRV-Z Score Hints at Overvaluation
The MVRV-Z score, which measures whether Bitcoin is trading above or below its historical fair value, currently stands at 2.2—meaning BTC trades 2.2 standard deviations above its mean.
Since 2017:
- 70% of days had a lower MVRV-Z
- Only 30% exceeded this level
Analysis shows that when MVRV-Z surpasses 2 and subsequently drops below it multiple times within 18 months (as now), 12-month forward returns are consistently negative.
However, longer-term outlooks remain positive:
- 1-month avg return: +10.34%
- 3-month: +34.25%
- 6-month: +59.83%
- 12-month: +191% (or +84% excluding 2017 anomaly)
Still, only 33% of high-MVRV-Z cases yielded positive 1-year returns, indicating elevated short-term risk despite strong long-term potential.
Macro Fundamentals Favor Hard Assets
Despite near-term volatility, long-term fundamentals are strengthening:
- U.S. budget deficit for FY2025 stands at $1.3 trillion**, projected to reach **$1.9 trillion
- Global inflation trends are rising
- Central banks worldwide—including in Europe—are increasing fiscal spending on defense and infrastructure
As deficits grow and monetary policy shifts toward yield curve control, investors are increasingly turning to non-sovereign hard assets like gold and Bitcoin as hedges against currency devaluation.
Analysts expect the Federal Reserve to resume balance sheet expansion by Q3 or Q4 2025—further boosting demand for decentralized stores of value.
Frequently Asked Questions (FAQ)
❓ Is Bitcoin entering a bear market?
Not necessarily. While short-term correction risks are high, long-term indicators—especially LTH accumulation—suggest this may be a healthy pullback rather than the start of a bear cycle. A break below $70,000 would increase bearish odds significantly.
❓ Why are ETF inflows important?
Spot Bitcoin ETFs provide regulated exposure for institutional investors. Sustained inflows signal growing mainstream adoption and add structural buying pressure that can support higher prices over time.
❓ What does “short-term holder cost basis” mean?
It refers to the average price at which coins held for less than 155 days were acquired. When price reaches this level, it often triggers selling from traders looking to lock in profits.
❓ Can Bitcoin reach $100K soon?
Technically possible—especially if price stabilizes above $95K and ETF inflows continue. However, macro headwinds and overheated indicators suggest caution; a retest of $95K with stronger volume may be needed before breaking six figures.
❓ How does USDT supply affect Bitcoin?
USDT acts as crypto’s primary trading pair and liquidity source. Stagnant growth suggests limited “ammo” for aggressive buying rallies. Renewed USDT minting could signal renewed bullish momentum.
❓ Should I buy Bitcoin now?
That depends on your risk profile. With MVRV-Z elevated and STHs selling, near-term downside risk is notable. Many analysts prefer waiting for a deeper correction (closer to $70K–$75K) or improved on-chain signals before adding exposure.
Final Outlook: Patience Over FOMO
The current environment reflects a classic late-stage bull market tension: strong price action met with cautious on-chain behavior. While long-term fundamentals remain robust—driven by fiscal expansion, inflation fears, and increasing adoption—the path forward likely includes significant volatility.
Without sustained ETF inflows or rising stablecoin liquidity, Bitcoin may struggle to maintain momentum above $95K. Conversely, a drop toward $70K could present a high-conviction entry point for long-term investors.
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