Bitcoin Rally Loses Steam as Profit-Taking Expands

Bitcoin's recent price surge is starting to lose momentum as profit-taking expands and demand weakens, according to CryptoQuant. The top crypto hit an eight-month high of $87,400 last week, but traders are increasingly taking profits.

CryptoQuant reported that trader profit margins have risen to their highest level since December 2024, with short-term traders' unrealized profit margin climbing to 33%. Historically, such elevated levels have encouraged market participants to lock in gains as unrealized profits become increasingly attractive to realize.

Another warning sign comes from altcoin exchange activity. The seven-day cumulative number of altcoin inflow transactions surged to 76,000, the highest level since October 17. The rise came 11 days after Bitcoin reached its previous all-time high.

The underlying demand supporting Bitcoin's rally is also weakening. Apparent spot demand has contracted by 170,000 BTC over the past 30 days, indicating that direct buying demand has continued to decline. Speculative futures demand growth fell from 164,000 BTC on September 14 to just 16,000 BTC currently.

Despite the warning signs, CryptoQuant said the broader bull-market structure remains intact above several key support levels. These levels could provide support if Bitcoin enters a correction.