Bitcoin’s price is nearing $100,000, led by a statement from Trump about a trade agreement. Analyst Kripto Mevsimi warns about aggressive profit-taking, indicating the possibility of a local peak. Historical patterns and current market dynamics suggest caution is needed, though macroeconomic conditions are unique compared to previous cycles.
Is Bitcoin Approaching a New Peak?
Bitcoin’s price has surged close to $100,000 again, a level not seen since February 21. This rally seems to have been sparked by a statement from Donald Trump, suggesting a forthcoming trade agreement with a significant nation. Yet, a number of indicators hint that this rapid rebound may have nudged Bitcoin’s value to a local peak, raising some apprehensions.
Analyst Kripto Mevsimi, writing on the CryptoQuant blog, cautions about the aggressive profit-taking trend among Bitcoin investors. He points out that the seven-day moving average (7DMA) of net profit has remained robustly positive since the start of 2024. A chart he shared indicates that in November 2024, Bitcoin hit a local peak, exceeding $90,000. There was another peak in December leading up to its historic high of $108,000, then a slight dip in January to $109,000 before the price fell again.
Since the decline, the 7DMA plunged, but an upward trend began in late April, although still not reaching the November peak levels. This trend suggests the potential for another local peak concerning the Bitcoin price. However, Mevsimi highlights that profit-taking is still significantly high, albeit not as intense as in late 2024. He warns that historically, such high profit-taking phases often precede short-term corrections or local peaks.
Despite the caution, Mevsimi reminds us that this doesn’t necessarily signal an impending macro top; rather, it suggests a local caution zone exists. He also anticipates increased short-term volatility given the current conditions.
When comparing the current situation to past cycles, some notable differences arise. According to Mevsimi, the introduction of spot Bitcoin ETFs back in January 2024 has altered market dynamics while investor psychology largely remains unchanged. Thus, investor behaviours may mirror previous cycles, but on a broader scale this time around. Furthermore, the macroeconomic landscape differs significantly from 2021, sharing some resemblance with 2017, Donald Trump’s initial year in office.
Globally, financial markets seem gripped by a lingering sense of fear. This sentiment is reflected in gold prices, which remain at highs, firmly entrenched within an ascending channel since mid-December. With the market still cautious about risk-on assets, Bitcoin’s recent rise seems to clash with the broader trends seen in recent months.
Bitcoin has somewhat benefited from a weakening dollar, as indicated by the Dollar Index (DXY), which continues to descend since Trump took office. There have been hints of a mini-rebound in the dollar recently. Still, it hasn’t changed the downward trend observed over the past three-and-a-half months significantly.
Examining Bitcoin’s price movements in the context of the Dollar Index over recent years reveals some intriguing patterns. The current trajectory of Bitcoin aligns with patterns from last year but appears to be moving at a faster pace. Last year saw a three-month rise followed by stagnation and a decline, but this year has experienced four consecutive months of rising prices, followed directly by three months of sharp declines.
Last year’s downturn led to a month of stagnation, while this year, Bitcoin seems to rebound immediately, bypassing that stagnant phase. This difference could stem more from the Dollar Index dynamics rather than Bitcoin itself. The dollar’s more rapid and continuous movement shapes the Bitcoin narrative, indicating that these anticipatory patterns for 2025 may not be anomalies but could result from the dollar’s definitive trends.
