Bitcoin’s cooling period: A pause before the next ascent?

With Bitcoin just shy of the $100,000 milestone, are profit-takers controlling the market, or is this a setup for another massive rally?

BTC cools off

Bitcoin (BTC) has had an exciting run recently, but it seems the party is taking a breather. After coming tantalizingly close to the $100,000 mark, the world’s largest crypto by market cap is cooling off.

As of Nov. 26, Bitcoin is trading around $94,300, marking a 3% drop in the last 24 hours. This pullback comes after BTC reached an all-time high of $99,655 on Nov. 22.

BTC 6-month price chart | Source: crypto.news

The recent price action seems like a classic case of profit-taking. This selling pressure was initially cushioned by strong demand from spot Bitcoin ETFs, which had been on a five-day streak of net inflows.

However, on Nov. 25, that trend reversed, with ETFs seeing $435 million in outflows, according to CoinGlass data.

Zooming out, however, Bitcoin’s broader sentiment is still bullish. Since the U.S. presidential election on Nov. 5, which saw Donald Trump’s unexpected return to the political stage, BTC has surged more than 30%.

Meanwhile, the anticipation of policy shifts, particularly with the impending resignation of SEC Chair Gary Gensler — set to step down on Jan. 20 2025 — has only fueled the narrative that crypto might finally find itself on friendlier regulatory ground.

So, where does Bitcoin go from here? Has it already peaked, or is this just a pause before another climb? Let’s find out.

What’s really happening with Bitcoin?

As Bitcoin weathers its current correction, the larger narrative surrounding BTC remains intricately tied to one of its most vocal champions: MicroStrategy.

The software-turned-Bitcoin investment firm, led by Michael Saylor, has once again made headlines with its monumental purchase of 55,500 BTC between Nov. 18 and Nov. 24.

The $5.4 billion acquisition — at an average price of $97,862 per Bitcoin — represents MicroStrategy’s largest single-week buy to date. With this latest spree, the company now holds approximately 386,700 BTC, acquired at an average price of $56,761 per token.

MicroStrategy has now disclosed Bitcoin acquisitions on three consecutive Mondays since Donald Trump’s re-election, amassing $11.43 billion worth of BTC in November alone.

Such aggressive accumulation adds growing institutional confidence in Bitcoin as a long-term asset, buoyed by expectations of a crypto-friendly regulatory environment under the incoming administration.

Yet, in the short term, these high-profile purchases add volatility to an already choppy market. On Nov. 25, Bitcoin traded as high as $98,000 levels, but following the announcement of the $97,862 purchase price, speculative traders reacted swiftly. BTC plunged to $92,240 within hours, triggering sharp liquidations in derivatives markets.

According to CoinGlass data, over $149 million in BTC futures contracts were wiped out in the last 24 hours as of Nov. 26, with bulls bearing the brunt — $113 million in long positions were liquidated compared to $35 million in shorts.

Retail traders tend to interpret institutional buy prices as market benchmarks, often moving their bids closer to those levels. When this happens during a period of heightened leverage in the market, even minor corrections can snowball into sharper sell-offs as liquidation cascades unfold.

Despite this short-term turbulence, the long-term outlook remains optimistic. With over 134,000 BTC pulled off the market in November alone, the firm is essentially locking away liquidity, leaving less Bitcoin available to meet future demand.

Over time, this could amplify price momentum during the next surge in buying interest.

Experts shed light on BTC’s path

​​Bitcoin’s recent pullback may feel unsettling, but experts across the crypto space are urging calm — and with good reason.

Santiment, a leading on-chain analytics platform, recently shed light on an important trend — the behaviour of large Bitcoin holders.

Despite Bitcoin’s price dipping below $95,000 this week, wallets holding at least 10 BTC have been on an accumulation spree, adding over 63,922 bitcoins in November alone, worth approximately $6.06 billion.

As Santiment mentioned, “any fall may be short-lived” as long as these wallets continue building their holdings.

Meanwhile, Ki Young Ju, the CEO of CryptoQuant, pointed out that even during the explosive bull run of 2021, steep corrections of up to 30% were common.

These pullbacks, he explains, were a natural part of the price discovery process that took Bitcoin from $17,000 to $64,000 in just months. As Ju puts it, “We’re in a bull market.”

Adding to this bullish sentiment is crypto analyst Michaël van de Poppe, who highlighted a fundamental difference between this cycle and those of the past: the sharp decline in Bitcoin reserves held on exchanges.

This drop signifies that more investors are moving their BTC into long-term storage, effectively reducing the supply available for trading. Van de Poppe sees this as a precursor to a “supply shock,” especially as more liquidity flows into the market.

With demand outpacing supply, the stage could be set for Bitcoin to surpass expectations. As he predicted, “This cycle, we’ll go way higher than we all expect.”

What to expect next?

For Bitcoin, the immediate focus remains centred on investor behaviour and macroeconomic triggers. While whales and long-term holders steadily absorb the available supply, near-term volatility persists as speculative traders recalibrate their positions.

The market appears to be walking a fine line between two scenarios: a consolidation phase around the $90,000-$95,000 range or a sharper pullback testing the $85,000 level, driven by liquidity pressures and derivatives positioning.

Despite this, the fundamentals — such as shrinking exchange reserves and consistent accumulation—indicate that any dips will likely encounter strong buying interest.

This dynamic sets the stage for a potential recovery if demand spikes, especially as the holiday season often sparks increased retail investor activity.

That said, altcoin investors should proceed with caution; while a dip in Bitcoin dominance can signal opportunities for altcoins, a sharp Bitcoin correction could pull the entire market downward, as we’re witnessing currently.

Compounding these market sentiments are geopolitical risks. The escalating Russia-Ukraine conflict and mounting instability in the Middle East have the potential to unsettle global markets, heightening risk aversion.

Such developments could temporarily weigh on crypto sentiment, particularly for altcoins, as investors flock to safer assets.

Amid this backdrop, all eyes are on the Federal Reserve’s December meeting, which carries key implications for financial markets, including crypto.

Currently, there’s a 52% probability that the Fed will cut interest rates by 25 basis points, bringing them down to 4.25%-4.5%.

If this reduction materializes, it could act as a tailwind for Bitcoin and the broader crypto market by easing borrowing costs and boosting liquidity.

Hence, Bitcoin’s immediate path will likely be shaped by the balance between accumulation and market sentiment. As always, trade wisely and never invest more than you can afford to lose.