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The cryptocurrency market is cooling off after a brief period of short-term overheating. Unlike prior cycles, CryptoQuant believes that the current overheating is smaller in scale and duration.<\/p>\n
This means that Bitcoin could face a limited short-term dip in the near future.<\/p>\n
The data focuses on the proportion of Bitcoin held for just 1 day to 1 week \u2013 an important metric that hints at market froth. While previous corrections in March-October 2024 and January-April 2025 followed more intense and prolonged overheating phases, the current one appears less severe and shorter in duration.<\/p>\n
Given that the recent price uptick was relatively modest, CryptoQuant expects<\/a> any near-term correction to be milder and shorter-lived. The analysis stated that this is part of a healthy cycle. A potential uptrend could emerge in the second half of 2025, especially if macroeconomic conditions and market sentiment turn favorable. Overall, the findings point to temporary consolidation rather than a full-blown downturn.<\/p>\n Bitcoin is currently changing hands at $118K. But the recovery to this level has prompted long-term holders to offload<\/a> some of their stash. This is similar to past distribution cycles. Simultaneously, short-term holders are also facing shrinking gains.<\/p>\n To top that, Matrixport also warned<\/a> of a possible pause in Bitcoin\u2019s rally as traders face key macro events, including Fed decisions and a White House report. Historical weakness in August and September may trigger profit-taking and sideways action, even as long-term momentum remains positive.<\/p>\n Amid signs of a temporary market cooldown, Bitcoin Vector revealed<\/a> that Bitcoin is currently testing a key resistance level. Despite this, the overall structure remains bullish but lacks strong momentum. As such, a confirmed breakout above $120.5K would validate the continuation of the upward trend, while $112.5K serves as critical support on the downside.<\/p>\n As long as Bitcoin holds this range, pullbacks may present buying opportunities.<\/p>\n LIMITED OFFER for CryptoPotato readers at Bybit: Use this link<\/a> to register and open a $500 FREE position on any coin!<\/b><\/p>\n<\/div>\n<\/div>\nBullish Setup Intact<\/h2>\n
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