Bitcoin May Face Deeper Pullback as It Struggles to Retain December 2024 All-Time Highs

• As Bitcoin struggles to maintain its position above key support levels, analysts are cautioning of a potential “deeper correction” ahead.

• After peaking in December 2024, Bitcoin’s recent price action suggests profit-taking may be impacting bullish momentum.

• “Some of Bitcoin’s demand metrics may be reaching a short-term top, which could imply a pause in the current rally,” remarked a CryptoQuant analyst.

Bitcoin’s recent price dynamics indicate a critical moment for bulls, with concerns of a deeper pullback as support falters. Analyzing BTC’s future prospects.

Bitcoin Decline Raises Concerns Over Bull Market Continuation

Recent analyses indicate that Bitcoin (BTC) could face significant challenges ahead, particularly in maintaining its position above critical all-time highs established in late 2024. Currently trading below $100,000, BTC/USD has retraced approximately 8% from its record highs.

On May 31, Bitcoin fell beneath its previous all-time peak, indicating resistance from multiple market sources. Analysts leveraging on-chain indicators started to forecast a potential slowdown in bullish momentum, pointing to a shift in market sentiment.

In a detailed report shared with Cointelegraph, CryptoQuant indicated that its demand metrics for Bitcoin are nearing a short-term apex. “Our estimate shows demand growth in the past 30 days is at 229,000 BTC, close to the previous high of 279,000 BTC recorded in December 2024,” the report noted.

Additionally, the analysis highlighted that whale-held Bitcoin balances had risen by 2.8% within the month—a trend often indicative of a slowdown in accumulation among larger investors.

Assessing Market Trends: Profit-Taking and Market Corrections

As Bitcoin’s price fluctuates, market participants remain optimistic regarding future price discovery. However, lower price levels may precede any significant upward movement.

Trader Mags, sharing insights on social media, pointed out, “On the daily chart, BTC has broken below the previous all-time high and is facing rejection at that same level. This might look like the start of a deeper correction.”

Mags emphasized the importance of the upcoming weekly candle close in assessing bullish strength. A failure to reclaim the previous close at $104,450 could signal a deeper pullback, which may form an inverse Head and Shoulders pattern before any recovery.

Market Sentiment: Navigating the Future of Bitcoin Prices

Despite the uncertainty surrounding Bitcoin’s immediate outlook, there remains a bullish interpretation provided the price maintains above $73,700, as outlined by trader Aksel Kibar. He holds a midterm price target of $137,000, consistent with his previous forecasts for 2025.

CryptoQuant, however, is more conservative, identifying $120,000 as a crucial profit-taking point. The divergence in expectations reflects the complex landscape Bitcoin operates within, driven by both speculative and fundamental factors.

The Role of Supply Metrics in Bitcoin’s Recovery

Supply dynamics continue to play a critical role in Bitcoin’s price trajectory. With a growing percentage of investors holding their assets long-term, the distinct shift toward accumulation could influence future market stability.

In the current environment, the balance between supply and demand is finely tuned. Should profit-taking intensify, it could lead to further corrections and testing of key support levels. Thus, the resilience of bullish sentiment will hinge on Bitcoin’s ability to sustain its position amidst these evolving dynamics.

Conclusion

In summary, Bitcoin’s current position presents a pivotal moment in its price journey. While analysts anticipate potential corrections, the ongoing accumulation by long-term holders suggests a robust demand foundation. Monitoring key levels, like $104,450, will be essential for determining the next leg in Bitcoin’s evolutionary path as it navigates through market uncertainties.