Has the macroeconomic bullish news triggered profit-taking?

Recently, a wave of corrections in the crypto market occurred against a backdrop of seemingly positive news:

• The US CPI data fell below market expectations, leading investors to anticipate that the Federal Reserve will extend its loose monetary policy.
• Chinese tech giants release impressive financial reports, boosting global risk assets.
• The China-U.S. trade relationship has released goodwill, signed a new agreement, and boosted confidence in the investment market.

Market sentiment was once extremely exuberant, with Bitcoin (BTC) reaching a high of $104,000 and Ethereum (ETH) breaking through $2,700. However, in such an optimistic atmosphere, many traders chose to lock in profits and cash out.

Liquidity causes price fluctuations

According to the observations of CoinPanel analyst Dr. Kirill Kretov, the market is currently in a state of high volatility and insufficient liquidity. He pointed out: “Even with low trading volumes, it is still enough to cause severe price fluctuations, which also explains why larger market cap assets, such as BTC and ETH, are not exempt.”

In other words, the structure of the crypto market is more fragile than that of traditional markets; a few large transactions can cause a price fluctuation of 5 - 10%, which is almost unimaginable in the stock market. Additionally, according to Santiment data, medium-sized wallet addresses holding between 10 to 10,000 coins have increased their holdings by more than 83,000 coins in the past 30 days, indicating their confidence in the long term. However, no one can stop the price fluctuations in the short term.

Which signals are worth paying attention to?

Does this pullback mean the end of the bull market? As it stands, it is far from over. Here are a few key signals:

1. Institutional funds are still flowing in.
   According to reports, medium-sized holders continue to accumulate BTC, and Coinbase was officially included in the S&P 500 index on May 19, which is expected to trigger nearly $9 billion in capital inflow.
2. The technical support has not yet been lost.
   Bitcoin is currently still maintaining a steady position above the $100,000 integer level, and the overall bullish structure has not been broken.
3. Strong fundamentals
   The inflation data in the United States continues to improve, global acceptance of Crypto Assets is rising, and participation from ETFs, mainstream banks, and tech giants is increasing.

Future Outlook

From the market trend perspective, despite a noticeable recent pullback, the overall macro environment and capital momentum still have supporting potential. Major institutions such as Standard Chartered Bank, VanEck, and ARK Invest have released optimistic forecasts, suggesting that the price of Bitcoin could reach between $120,000 and $200,000 by 2025, and even challenge highs of $500,000 to $2.4 million in the next five years. These predictions are not baseless; they are founded on increased institutional investment, accelerated mainstream adoption, and a resurgence in global capital market risk appetite.

The other side of the market is filled with risks and uncertainties. The soaring prices can easily trigger profit-taking, coupled with the still thin liquidity, which means that any slight movement could lead to severe fluctuations in the short term. Many investors are concerned whether this wave of growth is just another bubble fueled by money speculation.

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Summary

This wave of correction is actually just a normal scene in the cycle of the crypto market. The year 2025 will be a confrontation between faith and reality. For some, this is a turning point, an opportunity to layout the new order of future finance; while for others, this may be the last revelry before the bubble bursts.