Recent analysis from CryptoQuant indicates that Bitcoin is experiencing a milder correction phase, attributed to temporary market overheating and profit-taking by long-term holders, primarily affecting Bitcoin itself.
Reasons for Bitcoin's Mild Correction
According to CryptoQuant's research, the current Bitcoin correction is less severe and shorter than previous cycles due to brief overheating periods and profit-taking by long-term holders. The effect is mainly constrained to Bitcoin. Contributors from CryptoQuant, such as Crypto Dan and Yonsei, highlight the MVRV ratio as a correction indicator, emphasizing that profit-taking by long-term holders is a primary factor.
Stable Altcoin Market Amid Bitcoin's Correction
Bitcoin's price hovers around $118K, while altcoins like ETH remain stable. Increased activity from long-term holders and dormant whale wallets suggests a corrective phase contained to Bitcoin. Potential outcomes include increased short-term selling pressure, with miners also showing rising outflows. On-chain metrics indicate that current corrections are mild, and the market structure supports resilience.
Comparison with Previous Corrections in 2024
Previous corrections in 2024 and early 2025 were longer and deeper. The MVRV ratio now mirrors patterns seen before earlier local tops. An analyst from Kanalcoin noted that current on-chain analytics suggest a contained correction. The market structure and liquidity profiles point to stability, underpinned by decreased aggressive speculative pressure.
In conclusion, the current Bitcoin correction is perceived as less severe compared to previous cycles. This is attributed to the brief overheating and the actions of long-term holders, which also promote stability in the altcoin market.
