After a slight increase over the weekend, Bitcoin BTC fell back to $109,000 during Monday's lackluster trading, as traditional U.S. markets were closed for Memorial Day.

The top cryptocurrency is still up 1.7% over the past 24 hours, just a step away from the all-time high reached last week. Chainlink LINK and Avalanche AVAX tokens also rose by 3.3% and 3.4%, respectively.

These gains occurred overnight, influenced by the Trump administration's temporary withdrawal of tariffs on the European Union. Trump stated on Sunday that the 50% tariff on EU goods, scheduled to take effect on June 1 — which he had called for on Friday, leading to a sell-off in risk assets including cryptocurrencies — would be postponed until July 9. The European stock markets, initially hit by the threat, rebounded on this news.

Profit-taking by short-term holders intensifies

Although the crypto market pulled back some losses over the weekend's decline, Bitcoin may have entered a volatile phase as traders digest the rapid rise of nearly 50% from the April lows.

The increase in profit-taking by short-term holders may also limit Bitcoin's recent upside: this investor group has realized a cumulative profit of $11.4 billion in the past 30 days, compared to $1.2 billion in the previous 30 days, the report noted.

"At these levels, the risk is that the speed of profit-taking exceeds the inflow of new demand," wrote a Bitfinex analyst. "Unless there is a corresponding inflow of new capital into the market to absorb this supply, prices could start to stagnate or even decline.

"The next few days will be crucial to determine if the drop to $106,000 has set a range low or if a larger reset is imminent." If a deeper correction occurs, key levels to watch are the cost basis of short-term holders, around $95,000, which is the average price at which this group bought the asset.

Strong inflows into U.S. spot Bitcoin ETFs — totaling $5.3 billion as of now in May — low volatility, and a lack of bubbles suggest that Bitcoin may resume its upward trend in the third quarter after a brief pause.

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