Bitcoin will ‘likely continue to consolidate’ in this pullback phase

Bitcoin has experienced a notable pullback as macroeconomic uncertainties loom, and analysts are skeptical about its chances of quickly returning to the $109,000 all-time high (ATH) recorded in January. According to XBTManager, a contributor at CryptoQuant, the cryptocurrency appears to be in a consolidation phase following its recent ATH, which may persist due to ongoing liquidity concerns.

XBTManager emphasizes the need for caution, suggesting that significant upward movement will only occur once short-term holders—those who have held their Bitcoin for less than 155 days—begin to sell, and long-term holders return to purchasing. Until this shift occurs, traders are advised to adopt a risk-averse approach when trading Bitcoin.

The dynamics leading up to Bitcoin reaching its ATH in January are worth noting. During this period, short-term holders increased their supply, while long-term holders began selling. In the 30 days following Bitcoin’s peak at $109,000 on January 20, there was a noticeable drop of around 100,000 BTC in the supply held by long-term holders. This trend mirrors previous events, particularly in December, when long-term holder supply saw significant fluctuations as the price first approached six figures.

Current data reveals that the long-term holder supply of Bitcoin has decreased from 15.2 million BTC recorded on December 1 to approximately 14.4 million BTC, reflecting a decline of 800,000 BTC. The figures align with the price trends, as Bitcoin fell below $100,000 on February 4 amid concerns over a potential trade war due to tariffs proposed by the Trump administration, slipping further to $85,000 by late February.

Furthermore, at the time of the latest reports, Bitcoin is trading around $87,100, suggesting ongoing volatility. Market sentiment remains mixed as traders navigate the uncertainty, punctuated by macroeconomic events and regulatory discussions.

As always, the cryptocurrency market is fraught with risks. Therefore, potential investors are reminded to approach their trading decisions with careful consideration, keeping abreast of market trends and economic indicators.

Laura Bennett

Laura Bennett is a digital marketing strategist and writer with a keen eye for online trends and audience engagement. With over seven years of experience, she specializes in data-driven content and digital growth strategies. Based in Virginia Beach, VA, Laura covers the latest in marketing, business, and online branding.