Bitcoin briefly surged to a one-month high of $74,000 this week before retracing to around $69,000, a move accompanied by a significant wave of profit-taking from short-term holders, according to on-chain data from CryptoQuant.
Over the past 24 hours, short-term Bitcoin holders transferred more than 27,000 BTC, equivalent to approximately $1.8 billion, to exchanges to realize profits, marking one of the largest such spikes in recent months, noted CryptoQuant analyst Darkfost. The selling pressure was largely concentrated among those who acquired Bitcoin within the past week to month, with a realized price of roughly $68,000.
This behavior suggests that some recent buyers are opting to secure gains rather than hold for further appreciation. Short-term holders are generally considered the most reactive segment of the market, and their actions reflect a degree of caution amid heightened global uncertainty, including ongoing tensions in Iran.
Analysts at CoinDesk identified a potential “bull trap” in the recent price action, noting similarities to a breakout in January that ultimately led to a price decline. That decline was accelerated last Friday by comments from U.S. President Donald Trump calling for Iran’s unconditional surrender, a statement that too contributed to a surge in oil prices.
Despite the profit-taking, several factors are contributing to ongoing support for Bitcoin’s rally. Adrian Fritz, chief investment strategist at 21Shares, pointed to increasing bets on the passage of the Clarity Act, a U.S. Bill aimed at establishing a market structure for digital assets. Prediction markets currently assign a roughly 70% probability to the bill’s enactment by year-end, though Fritz cautioned that these markets remain relatively illiquid.
Rising geopolitical tensions are also driving investment, with some viewing Bitcoin as a “gold beta” trade – a way to capitalize on the safe-haven appeal of gold with potentially higher returns. Gold prices have recently rallied, prompting a rotation of capital into Bitcoin. Spot Bitcoin ETFs have also demonstrated resilience, experiencing net inflows exceeding $700 million this week despite a roughly 5% decrease in holdings during the recent pullback.
According to data published by CryptoQuant, altcoin volumes have shrunk by 50% as capital rotates back to Bitcoin. The firm also reported that 38% of altcoins are trading near their all-time lows, a level worse than that seen after the collapse of FTX. This weakness in the altcoin market contrasts with the relative stability of Bitcoin, further reinforcing the narrative of capital flight to the leading cryptocurrency.
Fritz emphasized that although political developments may have initially sparked the rally, its sustainability is rooted in geopolitical hedging and growing institutional confidence in the asset. Data from CryptoQuant also indicates a significant increase in accumulation from “accumulator addresses” – long-term holders who consistently acquire and retain Bitcoin – suggesting a strong underlying demand.
As of March 2nd, approximately 46% of the circulating Bitcoin supply, or 9.09 million BTC, was held at a loss, according to CryptoQuant. This represents the second-highest concentration of loss-making supply since 2022, surpassed only by the period following the collapses of Luna, and FTX. Short-term holders are currently facing an average unrealized loss of 26.3%, a level historically associated with advanced bear market phases.
