Bitcoin (BTC) is entering one of the most intriguing price ranges in its current market cycle. After a significant rally, the leading cryptocurrency has stabilized above the $104,000 mark and briefly touched the $105,000 zone. While this has inspired optimism among traders, on-chain metrics and market sentiment suggest it may also be a prime zone for profit-taking—especially for long-time holders and whales.
BTC Eyes the $106K Barrier: A Historic Profit Zone
As of May 12, 2025, BTC appears poised between two powerful forces: long-term holders aiming to take profits and new entrants continuing to accumulate. Alphractal’s widely followed on-chain data shows that Bitcoin has entered the “Alpha Price” zone—a level historically associated with profit realization, particularly by early adopters or “OG whales.”
At current levels, more than 97% of the circulating BTC supply is in profit, a threshold not seen since the December 2024 market highs. When such a large portion of supply becomes profitable, historical patterns show that older wallets, especially those inactive for years, begin offloading some of their holdings. While this doesn't mean the rally is over, it raises the odds of short-term corrections.
> "Bitcoin is at the Alpha Price. An ideal moment for OG Whales to take profits. I'm not saying the price will stop rising! But given the incredible accuracy of this Onchain pricing metric, everyone should be more cautious..."
— Joao Wedson, Alphractal Analyst
Market Sentiment: Greed Creeps Back In
One of the most telling signs of an overheated market is the Bitcoin Fear and Greed Index, which has surged back to 70, marking a strong “Greed” reading. This is a sharp reversal from the index’s sub-40 score just a month ago, when fear dominated after a March correction.
Such a rapid shift in sentiment often precedes a local top or a period of consolidation. Traders become overly optimistic, fueling momentum-based strategies—yet this is often the time when seasoned players begin taking chips off the table.
Derivatives Point to a Battle Around $106,500
The $106,000 to $106,500 range has also become the battleground in the Bitcoin futures and options markets. According to Coinglass data, there’s over $83 million in short liquidity built up at exactly $106,515.86, representing the single largest cluster of short interest in the current cycle.
If BTC were to test or breach this level, a short squeeze may follow—fueling a rapid upward move as short-sellers rush to cover their positions. However, on May 12, Bitcoin dipped to $102,000, flushing out a large number of leveraged long positions. This move highlights the market’s current volatility and underscores the risk of overleveraged strategies.
A Cooling RSI Signals Caution
The Relative Strength Index (RSI) for Bitcoin has cooled down from overbought levels and now sits in a neutral zone. While this reduces the immediate risk of a severe pullback due to overheating, it also signals reduced buying momentum. Combined with falling open interest in the derivatives market—from $32 billion down to $31 billion—it’s clear that traders are becoming more cautious.
Still Accumulating: The Bullish Divergence
Interestingly, while many indicators point toward a possible short-term correction or pause, long-term accumulation continues quietly in the background.
Whale wallets holding over 10,000 BTC increased by two addresses in recent weeks.
Wallets holding 100 to 1,000 BTC rose by 2,000 in the last six months—a clear sign of strategic accumulation.
BTC is also seeing outflows from exchanges, indicating that coins are being moved to cold storage, not prepared for immediate selling.
One major reason for continued buying? Institutional interest. Bitcoin ETFs, along with corporate treasuries like MicroStrategy, are still actively accumulating, often storing assets in custodial solutions that don't immediately reflect in traditional on-chain whale metrics.
Will Bitcoin Retest All-Time Highs?
The big question is whether Bitcoin can retest its all-time high of $109,000 in the near term. The conditions are favorable—strong ETF flows, corporate interest, and a capped supply—but the path may not be smooth. Resistance around $106K is significant, and unless a new wave of buyers enters the market, BTC could experience sideways movement or even a dip before moving higher.
That said, the “Bitcoin Rainbow Chart” still suggests BTC is in the long-term accumulation zone, a bullish indicator for those with a longer investment horizon.
Conclusion: Tactical Patience is Key
Bitcoin is dancing near a zone where caution and optimism collide. On-chain data, market sentiment, and trading activity all point toward a potential local peak, yet underlying fundamentals remain strong.
Whether you are a short-term trader or a long-term believer, this is a moment that calls for tactical patience. Short-term volatility is likely—but so is the potential for another leg up if key resistance zones are cleared. For now, watch $106,000 carefully. It may be the line between profit-taking and breakout.
