While spot Bitcoin ETFs showed strong accumulation in previous weeks, this trend has recently reversed. This change indicates investors are taking profits. Meanwhile, market volatility suggests a short-term risk of a price decline for Bitcoin. 

According to Glassnode data, the number of active unique addresses on the Bitcoin network has also decreased. The continuously declining address count over the past seven days signals market stagnation and weak demand. At yesterday’s close, the active address count hit a weekly low of 721,086. 

When combined with capital outflows from institutional investors and the drop in individual trading activity, the likelihood of a short-term BTC price correction strengthens. 

Spot Bitcoin ETF Outflows Shake Institutional Confidence 

Net outflows from Bitcoin ETFs indicate a reduction in institutional investors’ risk appetite. Significant profit-taking occurred especially above the $120,000 price level. Thus, inflows into ETFs that had been supporting the upward trend have turned into outflows. 

Institutional capital flows usually reflect market sentiment and confidence, making this development noteworthy for market participants. Additionally, profit realization by professional investors points to an increased perception of market risk. 

The decline in active addresses on the Bitcoin network signals a weakening in transaction volume and demand. This decrease stands out as a fundamental metric supporting price movements.

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This rejection sent BTC into a rapid decline, raising concerns among traders and market observers alike.

New Resistance Emerges As Key Level Breaks

Following the failed attempt to breach 109,400 dollars, Bitcoin also lost the 108,791-dollar support, falling as low as 107,500 dollars. With this shift, 108,791 now acts as a fresh resistance point, while the next critical support lies near 107,000 dollars.

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Analysts warn that if this support fails, BTC could continue its slide toward the 105,000-dollar range, marking a deeper correction in the short term. Such a move could trigger further selling and a rise in bearish sentiment.

What Should Investors Watch For?

Given the recent developments, caution is advised. Technical indicators are weakening, and declining trading volumes suggest a drop in market confidence. Holding the 107,000-dollar support is essential for a potential rebound.

Should that level give way, Bitcoin may face accelerated losses. Investors are urged to manage risk carefully and set clear stop-loss levels to protect against further downside volatility.

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Following a strong rally in April, BTC price entered its first significant correction phase. The asset fell from its all-time high of approximately $111,970 to below $105,000. This decline was notably influenced by increasing open positions in derivative markets. Bitfinex analysts reported that the liquidation of many long positions pressured prices downward. 

Bitcoin Options Open Interest Signals Rising Volatility

The recent two-week pullback has revealed a notable acceleration in short-term profit-taking in the crypto market. Market participants remain cautious about whether Bitcoin will resume its upward trend. Rising volatility has intensified uncertainties about the market’s direction. 

Moreover, open positions in Bitcoin perpetual futures have also increased rapidly, indicating investors’ preference for actively positioning against price movements. According to Bitfinex analysts, this concentration suggests deeper institutional participation and heightened market sensitivity to volatility. 

Bitfinex analysts stated: 

“The key point here is that the significant increase in derivative activities signals expanding institutional involvement. Coming after Bitcoin’s recent all-time highs, it shows market participants positioning themselves for increased volatility.” 

After the options expiry on May 29, open interest dropped to $39 billion but remains well above historical averages. High open interest especially highlights institutional investors turning to hedging strategies. 

Macro Factors and Profit Taking 

Meanwhile, rising U.S. Treasury yields, a strengthening dollar, and developments in trade policies triggered a broader risk-off sentiment in crypto markets. Pressure on Bitcoin intensified alongside these macro winds, with aggressive profit-taking accelerating the price drop. 

However, the Relative Unrealized Profit metric shows that investors on the network still hold above-average paper profits. This indicates that selling pressure is not yet exhausted and short-term volatility may continue. 

In summary, these data suggest that although the market structure remains strong, short-term turbulence potential is increasing. The sustainability of demand will be a critical factor in determining the price movement direction. 

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