Bitcoin faces potential selling pressure as exchange-traded fund (ETF) outflows and investor profit realization contribute to heightened short-term correction risks after its recent rally to a new all-time high.
Recent data indicates a significant shift in Bitcoin ETF flows, with investors pulling $199 million out of these funds. This outflow ends a trend of six consecutive weeks of positive inflows, signaling changing investor sentiment.
The shift comes after Bitcoin reached a peak price of $122,054 earlier this month. This significant appreciation prompted numerous holders to lock in profits, adding downward pressure on the asset.
Further evidence of weakening demand emerged with a noted decline in the number of active Bitcoin addresses on the network. This reduction in on-chain activity underscores increasing downside risks in the near term.
Technical analysis points to key price levels influencing Bitcoin’s trajectory. Resistance is evident around the $120,811 mark, while critical support sits at $116,952. A sustained drop below this support level could lead to a retest of the $114,354 zone.
While the conditions suggest a higher probability of a short-term price pullback amid weakening demand and realized profits, the fundamental long-term outlook for Bitcoin remains positive among many market participants.