After gently rising over the weekend, Bitcoin
slipped back to $109,000 on Monday during sluggish trading as traditional U.S. markets remained closed for Memorial Day.
The leading cryptocurrency remains up 1.7% in the last 24 hours, just a breath away from its all-time high reached last week.
In the CoinDesk 20 — an index of the top 20 digital coins by market capitalization, excluding stablecoins, memecoins, and exchange tokens — the day’s standout performer is decentralized exchange Uniswap
, whose token surged by 6.6%. Tokens for Chainlink and Avalanche also increased by 3.3% and 3.4% respectively.
The overnight gains were fueled by the Trump administration’s temporary retraction on EU tariffs. On Sunday, Trump announced that the 50% tariffs on EU goods, initially set to begin on June 1 and having sparked a sell-off in risk assets including cryptocurrencies, would be delayed until July 9. Following the news, European stocks, initially rattled by the tariff threats, rebounded.
Increased Profit-Taking by Short-Term Holders
While the crypto market has recouped some of the losses incurred over the weekend, BTC may have entered a volatile phase as traders evaluate the rapid, nearly 50% rise since April lows, according to analysts at Bitfinex in a Monday report.
Increased profit-taking by short-term holders could limit Bitcoin’s near-term upside: this group realized a cumulative profit of $11.4 billion over the past 30 days, compared to $1.2 billion in the previous period, the report indicated.
“At these levels, we risk profit-taking outpacing new demand inflows,” Bitfinex analysts noted. “Unless there’s a concurrent influx of new capital into the market to absorb this supply, prices may start to stall or even decline.
The next few days will be crucial to determine if the dip to $106,000 has established the range lows, or if a more significant reset is on the horizon, the report stated. Should a deeper pullback occur, key levels to observe include the short-term holder cost basis around $95,000, the average price this group paid for the asset, the authors highlighted.
Strong inflows to U.S. spot Bitcoin ETFs — totaling $5.3 billion in May so far —, low volatility, and a lack of exuberance suggest that Bitcoin will likely resume its upward trend into the third quarter of the year after a pause, the analysts speculated.
Read more: Bitcoin Regains $110K After Weekend Sell-Off; ADA, DOGE Lead Uptick in Crypto Majors
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