Analyst: Bitcoin Volatility Due to Profit Taking by Short-Term Investors, Overall Trend Still Healthy

On May 16th: Bitcoin dropped to just a bit above $101,000 last night and then bounced back to above $104,000. Meanwhile, altcoins showed relatively weaker performance and generally declined. Ruslan Lienkha, the Chief Market Officer of YouHodler, stated that the current pullback seems to be a retracement within a larger mid-term upward trend. After the delay of the U.S.-China tariff, the upward momentum of the stock market has slowed down, and short-term traders have started to lock in profits. This change in sentiment has spread to higher-risk assets, including Bitcoin. Kirill Kretov, the Trading Automation Expert of CoinPanel, mentioned that any price fluctuation of less than 5% is usually regarded as market noise. Part of the reason for this fluctuation may be profit-taking as traders have been realizing gains after the recent upward trend. Due to such thin liquidity, even a small sell-off can quickly turn into a significant pullback. Despite being affected by short-term volatility, the overall price trend appears healthy and there are no clear signs of an imminent peak. Vetle Lunde, the Senior Analyst of K33 Research, noted that BTC has just come out of one of the longest periods of negative funding rates, indicating a defensive position. This is similar to the patterns seen in October 2023 and October 2024, which are far from the price action near previous market peaks. He is optimistic and believes that BTC has not shown signs of a bubble after exceeding $100,000, paving the way for a potential new high. According to Steno Research, the tailwind for cryptocurrencies comes from the hidden expansion of private credit, especially in the United States and Europe. Leading indicators predict that the global financial landscape will improve in summer, mainly driven by the weakening of the U.S. dollar.