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Bitcoin has shifted into a corrective leg following its recent pullback, but from a market-structure perspective, the broader trend remains constructive.
Price action is behaving more like a controlled retracement than a breakdown, fitting neatly within a higher-timeframe setup that historically precedes continuation.
Bitcoin Profits Have Declined
From a trader’s lens, the recent drawdown looks less like panic selling and more like weak hands being flushed out. Short-term sellers appear to be stepping aside, while larger and more patient participants are quietly repositioning.
This rotation often marks the transition from late-cycle distribution into early accumulation, creating the conditions for a volatility expansion to the upside once liquidity rebuilds.
On-chain data reinforces this narrative. Network-wide profitability has compressed meaningfully, with the share of Bitcoin supply in profit dropping from 75.3% to 66.9%. This move pushed profitability below the lower historical threshold around 69.1%, a zone that has repeatedly coincided with local price stabilization.
When a growing percentage of holders sit underwater, sell pressure typically dries up, as the incentive to exit at unfavorable prices diminishes.
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Historically, dips below this lower profit band have acted as a reset mechanism, allowing price to form a base before the next impulsive leg higher. Although a brief, short-term bearish phase recently disrupted this pattern, current price levels are significantly lower than prior peaks.
Long-term holder behavior further strengthens the bullish case. The Long-Term Holder Net Unrealized Profit/Loss (LTH NUPL) metric shows profits compressing toward levels that have historically altered holder behavior.
When LTH NUPL drops below 0.60, long-term participants typically slow or halt distribution, choosing instead to wait for improved conditions. In previous cycles, this shift has marked the early stages of renewed accumulation and reduced sell-side pressure, allowing price to recover methodically.
BTC Price Is Ambitious
From a technical standpoint, Bitcoin price remains inside an ascending broadening wedge. Price recently bounced from the lower boundary of this structure and is now trading near $88,475. The immediate task for bulls is to clear $89,241 and reclaim the psychological $90,000 level. Acceptance above $90,000 would signal improving short-term momentum and confirm strength within the pattern.
A confirmed breakout from the wedge opens the door for higher objectives. A move toward $98,000 is likely the first major milestone, followed by a healthy consolidation pullback toward $95,000 to establish support. This base would be critical before any sustained push toward the $100,000 mark.
However, downside risk cannot be ignored. If selling pressure resurfaces or macro conditions worsen, a failure to hold current levels could send Bitcoin below $87,210. In that scenario, a deeper retrace toward $84,698 becomes likely, invalidating the bullish setup and postponing the breakout thesis.
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