Key Takeaways
- Bitcoin’s recent rally has been met with an unusual investor response, as profit-taking remains minimal and buying volume stays moderate. A supply squeeze may be on the horizon, with available Bitcoin on exchanges dropping to a market low.
Bitcoin [BTC] has seen a significant surge over the past week, first closing at a new weekly high of $109,216 and then forming an all-time high of $118,856 at the time of writing.
Interestingly, this rally has not triggered typical investor behavior—there’s little profit-taking. In fact, more traders appear bullish, though not excessively so.
AMBCrypto analysis points to historical trends, but one thing is clear: market sentiment remains strongly bullish.
Short-term holders refuse to sell — What’s going on?
On-chain data reveals that investors are taking an unconventional approach during this rally.
According to CryptoQuant, short-term holders (STHs), who accumulated Bitcoin at an average price of $100,315, are now roughly 18% in profit, but have yet to sell.
These holders typically keep BTC for less than 155 days and are known for quickly taking profits.
Source: CryptoQuant
The chart below highlights how STHs usually behave when Bitcoin hits a new high. Historically, they begin with slow distribution, followed by a period of renewed accumulation.
In this case, the SOPR (Spent Output Profit Ratio)—a metric used to measure profit-taking activity—has remained neutral.
There have been no strong signals of either accumulation or distribution, suggesting STHs are willing to hold longer than usual.
Derivatives market calm — No FOMO in sight
The derivatives market also reflects this restrained optimism. According to CryptoQuant, the funding rate currently sits at 0.01.
This indicates a modest bullish bias, contracts are slightly favoring longs, but without any signs of extreme sentiment or fear of missing out (FOMO).
Source: CryptoQuant
This further supports the notion that market participants are positioning themselves cautiously, even amid new highs.
Will the FVG zone pull Bitcoin back?
When Bitcoin previously broke above $111,980, it left behind what’s known as a Fair Value Gap (FVG)—a zone where orders were left unfilled.
Price later revisited that gap, rebounded, but failed to sustain an extended rally due to selling pressure.
A similar FVG exists now between $115,222 and $111,980. If historical patterns play out, Bitcoin might retest this zone.
Source: TradingView
However, if selling pressure stays low—as it is currently—and both STHs and derivatives traders maintain a bullish stance, Bitcoin could continue its upward momentum.
In that case, the FVG may act as a launchpad for the next leg up, potentially pushing BTC beyond its recent all-time high.
A supply squeeze brewing?
Bitcoin’s supply squeeze appears to be emerging in an unusual way.
Bitcoin’s availability on exchanges continues to fall, and the dynamic between long-term holder (LTH) accumulation and miner issuance suggests mounting demand.
Glassnode data shows that LTHs are acquiring Bitcoin at a faster rate than miners are issuing new supply.
Source: Glassnode
This trend points to a strong bid under the market. During periods of high demand, investors typically become more reluctant to sell unless prices are higher—setting the stage for further upward pressure on BTC’s price.
