Bitcoin slipped 0.8% to $113,467 on August 6, 2025, marking one of its lowest points in the past month. The cryptocurrency faces pressure from a combination of profit-taking by long-term holders, global macroeconomic uncertainty, and fading momentum from altcoins.
After a powerful rally in July that saw Bitcoin testing highs above $120,000, the market has entered a period of consolidation and correction. Amidst rising concerns over U.S. trade tensions and a broader global slowdown, Bitcoin has not been immune to the shifting sentiment.
Long-Term Holders Trigger a Wave of Profit-Taking
One of the key drivers behind the recent decline is the decision by long-term holders to secure profits. According to Maartunn, an on-chain analyst at CryptoQuant, early whales — notably one selling 80,000 BTC — initiated a wave of selling that echoed across the market.
“This isn’t just the act of a single whale. We’re witnessing a broader trend of long-term investors taking profits after Bitcoin hit new highs,”
— Maartunn, CryptoQuant analyst, 2024.
These moves have eroded the bullish momentum that propelled Bitcoin in July and contributed to the price retreating to levels seen earlier in the summer.
Institutional and Retail Interest Rises — But Not Enough
Retail investors have re-entered the market following Bitcoin’s recent highs, a typical behavior observed during bull runs. Institutions, including firms like Strategy and Metaplanet, have also increased their crypto exposure.
However, the combined buying power of these two groups has not been strong enough to maintain price levels above the key $120,000 mark. This shortfall in demand has left room for selling pressure to intensify and sentiment to weaken.
Short-Term Investors Hit Hard by Sell-Off
Short-term traders have borne the brunt of the latest downturn. Panic-selling and stop-loss triggers have led to realized losses across multiple sell-off waves. On-chain data reveals three key periods of capitulation:
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52,230 BTC sold at a loss
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42,493 BTC sold in a subsequent wave
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A final extended sell-off of 70,028 BTC after July 31
“The post-July 31st sell-off stood out in both size and duration, showing a sharp drop in short-term investor confidence,”
— Maartunn, CryptoQuant analyst, 2024.
This data points to an increasingly fragile short-term market structure, where fear-driven exits are adding to downward pressure.
ETF Outflows Weigh on Market Recovery
Another contributing factor to the price weakness is the outflow of funds from Bitcoin ETFs. While these withdrawals have not been as severe as past correction phases, they still act as a headwind.
ETF capital outflows reduce institutional exposure and reinforce bearish sentiment, making it more difficult for Bitcoin to regain upward momentum. The current outflows, although relatively moderate, have still limited the market’s ability to rebound.
“ETF outflows may be smaller than before, but in combination with long-term profit-taking and short-term panic selling, they have added significant pressure to Bitcoin’s price,”
— Maartunn, CryptoQuant analyst, 2024.
Key Takeaways
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Bitcoin is under pressure from long-term holders cashing out after July’s rally.
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Retail and institutional participation has increased but lacks sufficient force to sustain $120K levels.
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Short-term holders are facing significant losses, adding to bearish sentiment.
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ETF outflows, while not extreme, continue to hamper price recovery.
Frequently Asked Questions (FAQ)
What are the main reasons behind Bitcoin’s recent price drop?
The decline is due to profit-taking by long-term investors, sell-offs from short-term traders, ETF outflows, and broader macroeconomic concerns such as trade tensions and slowing global growth.
Why are long-term holders selling now?
They’re capitalizing on July’s sharp rally, using recent price peaks as an opportunity to secure gains after prolonged holding periods.
What risks are short-term investors facing?
Many have been forced to sell at a loss due to price volatility, triggering a wave of panic-selling that has amplified downward pressure.
How are ETF outflows affecting Bitcoin?
Even though recent ETF outflows are smaller than during prior corrections, they still contribute to bearish market sentiment and make it harder for Bitcoin to bounce back.
What role are institutions playing during this period?
Institutional investors like Strategy and Metaplanet are increasing their Bitcoin exposure, but their buying power hasn’t been enough to offset the selling pressure from other investor groups.
As Bitcoin navigates the second half of 2025, market participants will closely watch how investor sentiment, institutional inflows, and macroeconomic developments continue to shape the cryptocurrency’s path forward. For now, caution appears to be the prevailing mood — with resistance near $120,000 and support being tested around the $113,000 level.
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