Bitcoin Pulls Back Near Key Levels: What’s Behind the Reversal?

Bitcoin slipped to $107,000 on Friday after reaching $110,500 the day before, placing it just 1.33% shy of its all-time high at $111,970. But that momentum quickly faded. What stood out was that the pullback came even as Bitcoin exchange-traded funds were still recording inflows, leaving many wondering what might be driving the drop.

Profit-Taking and Political Tensions Shape Price Action

One possible reason for the pullback is that some short-term traders may have chosen to take profits. With Bitcoin trading just below its record level, the proximity to a key price zone could have encouraged some investors to lock in gains ahead of the weekend. This type of cautious move is not uncommon when prices approach major resistance.

However, Bitcoin’s latest reversal isn’t just about crypto—it reflects growing global unease and cooling market enthusiasm.

Here’s what’s weighing on sentiment:

• Trump’s tariff deadline fuels fears of a trade war, leaving investors cautious about global market fallout.
• Since early June, exchange volume momentum has slowed, with the monthly average at $5.9B—only 7% above the yearly average of $5.5B.
• On-chain activity stalls despite stable prices, pointing to hesitation and declining risk appetite.
• Slower market action suggests traders are playing it safe amid mixed signals from the broader economy

Dormant Bitcoin Wallets Stir Panic, but No Sell-Off Confirmed

Further stoking market unease was a report from Lookonchain, revealing activity from eight Bitcoin wallets that had remained untouched for 14 years. These long-dormant addresses transferred a combined total of over 80,000 BTC—equivalent to roughly $8.7 billion in value. The sudden movement of such a large sum sparked speculation across the market.

Retail traders appeared uneasy, as large Bitcoin transfers often raise fears of sell-offs. This may have led some to sell their holdings to avoid potential losses. Despite the alarm, blockchain data pointed to a different motive. Julio Moreno, Head of Research at CryptoQuant, analysed the transactions and noted that the movements appeared to be consolidations rather than preparations to sell. 

Broader Economic Worries Add to Pressure

Outside the crypto space, shifting economic conditions are also weighing on investor sentiment. Michael Hartnett, chief investment strategist at Bank of America, has signalled caution, noting that U.S. equity valuations remain elevated. With the S&P 500 hovering just below the 6,300 mark, he sees that level as a possible turning point where some investors may begin to scale back exposure.

Hartnett warned that financial bubble risks are increasing, especially following the House’s approval of a $3.4 trillion fiscal plan that includes major tax cuts. He sees the added stimulus as something that could further stretch already overheated markets.

That caution is now spilling into crypto, further explaining Bitcoin’s recent drop and its difficulty staying above the $111,000 mark.

Analysts Eye New Bitcoin Peak as Patterns Hold

Despite near-term weakness, some analysts maintain a positive outlook. Crypto market commentator Crypto Seth noted that Bitcoin could be poised to set a new all-time high within weeks. He pointed to strong inflows into U.S.-based Bitcoin ETFs, which attracted around $1 billion over the last two days, indicating sustained institutional interest.

Elsewhere, analyst Ash Crypto stated that historically, Bitcoin tends to peak roughly 18 months after each halving. If the pattern continues, the next major top could arrive in September.