Bitcoin Experiences Two Waves of Volatility Impacting Market Sentiment: Short-Term Momentum Slows Down While Long-Term Capital Accumulates Quietly

Recent Market Movements of Bitcoin (BTC)

Recently, the Bitcoin (BTC) market has experienced two waves of significant volatility, with prices retreating from a high of around $111,000 to the range of $107,000 in the short term, leading to a large number of leveraged long positions being liquidated. However, behind this volatility, CryptoQuant analyst Amr Taha has observed an important structural change, where short-term traders are being washed out, while long-term holders are quietly accumulating, indicating a deep redistribution of capital within the market.

Amr Taha pointed out that the first wave of liquidations occurred when Bitcoin fell below $111,000, causing over $97 million in long positions to be forcibly closed. Subsequently, when the price dropped below $109,000, a second wave of liquidations totaling $88 million occurred, as short-term leveraged traders could no longer bear the losses.

In contrast, the behavior of long-term holders (LTH) has shown a distinctly opposite trend. The “Realized Cap” has rebounded to a new high of $28 billion since April, indicating that they are actively taking advantage of market pullbacks to accumulate at lower prices. Here, “Realized Cap” refers to the total value of all Bitcoin in circulation, calculated based on the price at which each Bitcoin last moved on-chain. Amr Taha noted, “This strategic accumulation reflects the long-term holders’ firm belief in future prices.”

However, from a technical perspective, short-term risks still remain. According to CoinDesk analyst Omkar Godbole, Bitcoin is currently trying to hold the support level formed by the rising trend line from $75,000 to the all-time high of $110,000. Yet, the 30-day momentum rate has shown a “bearish divergence” signal, indicating that prices are rising while momentum indicators have not reached new highs, suggesting that momentum is weakening.

Moreover, the MACD histogram on the daily chart has also flipped to negative, further confirming that market momentum is weakening in the short term. This implies that Bitcoin may technically break below its current rising channel; if support is lost, the market could retest the key psychological level of $100,000, which was previously resistance turned support.

Despite the weak short-term trend, the overall mid-term structure remains optimistic. The 50-day and 200-day SMA formed a “golden cross” in early May, indicating that the long-term trend is still being established. Capital flow and on-chain indicators also show signs of bullish positioning.

In summary, the recent short-term volatility has washed out speculative leveraged funds from the market, leading to a temporary fatigue in momentum; however, from the perspective of capital structure and mid-term technical trends, the market has not lost order, but rather shows signals of long-term capital increasing its positions. Investors should pay attention to whether the key support area below holds, and whether Bitcoin can regain stability at $110,000 in the coming week, thus challenging higher ranges.