Bitcoin’s recent rally has shifted into a consolidation phase, marked by profit-taking activity and price retracement. Analysis of the options market, however, points towards persisting short-term bullish sentiment among traders.
The price of Bitcoin (BTC) has declined approximately 4% this week, retracing around 7% from its reported all-time high of $123,000 to trade near $114,000. This pullback aligns with significantly elevated profit-taking, which spiked to nearly $3 billion daily during July. Historical parallels suggest levels of realized profit mirroring previous local market peaks.
Despite the consolidation, derivatives activity indicates traders anticipate potential near-term upside. Market participants are engaging in increased hedging, specifically evidenced by significant buying of short-dated call options. This activity, combined with a recorded rise of between 4% and 6% in the BTC 25-month delta skew metric, typically signals a bullish bias for the immediate future. The Coinbase Premium Index (CPI) concurrently turned negative this week, reflecting lower purchasing demand from U.S. investors relative to global trading venues.
The current market structure reflects caution through take-profit orders but retains underlying short-term optimism as gauged by positions in the options market.