Bitcoin Faces Short-Term Exhaustion Amid Market Volatility

According to Cointelegraph, Bitcoin (BTC) has recently shown signs of potential short-term exhaustion, marked by the formation of a bearish engulfing candle on the daily chart. This development follows a 19% rally over the past 21 days, suggesting that the cryptocurrency might be experiencing a temporary slowdown. The bearish signal was further confirmed by a shooting star pattern, indicating possible market fatigue. Data from CryptoQuant reveals that the Miners’ Position Index (MPI) has surged to its highest level since November 2024, reaching above 2.78. This index measures the amount of Bitcoin miners send to exchanges relative to its one-year average, with a high reading suggesting increased selling pressure. Despite this, the current MPI level remains below those typically seen near bull market peaks, indicating that while short-term pressure may be present, it is not yet at critical levels. Additionally, realized profit and loss from BTC deposits to centralized exchanges have reached an all-time high of $9.29 billion, highlighting aggressive profit-taking. Crypto analyst Crazzyblockk notes that these metrics suggest a high-risk zone where short-term volatility could intensify, even as the broader bullish trend remains intact. Meanwhile, trading platform Hyblock Capital has observed that Bitcoin open interest is nearing "frothy levels," which historically precedes local tops and corrections when the Fear & Greed Index is in "Extreme Greed" territories. Despite the recent dip triggering panic selling, with nearly 50,000 BTC offloaded at a loss within 24 hours, data indicates strong buying interest. Investors have accumulated over 196,600 BTC, valued at more than $23 billion, between $116,000 and $118,000. This substantial dip-buying reflects continued market confidence and conviction in Bitcoin’s long-term trajectory. From a technical standpoint, Bitcoin remains within its bullish long-term structure as long as it consolidates above the $112,000 level. A period of sideways movement or minor pullback is considered a healthy reset, allowing the market to cool off and eliminate excess leverage. While the recent bearish engulfing pattern may suggest short-term exhaustion or a potential reversal, it does not invalidate the broader uptrend. As long as key support levels hold around $112,000, the probability of BTC resuming its upward momentum remains high. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.