Bitcoin Price Analysis: Why Analysts Call Recent Gains a ‘Bear Market Rally’
According to on-chain analytics firm CryptoQuant, Bitcoin’s recent price surge may lead to increased profit-taking. Although Bitcoin has climbed over 20% since early April, hitting a three-month high, experts warn that this move is likely a “bear market rally” rather than a permanent trend shift.
The Rise in Profit-Taking Activity
Bitcoin holders are increasingly cashing out their gains. On May 4, investors realized 14,600 BTC in daily profits, the highest level recorded since late 2025.
The Short-Term Holder Spent Output Profit Ratio (STH-SOPR) has remained above 1.00 since mid-April. This indicator confirms that short-term investors are consistently selling at a profit, signaling a period of broad distribution among holders.
A Structural Shift in Market Dynamics
The market has reached a critical inflection point. For the first time since December 2025, the 30-day rolling net profit has turned positive, reaching +20,000 BTC. This follows a brutal period in February and March where net losses peaked at nearly -400,000 BTC.
While this return to profitability is a positive sign, CryptoQuant’s head of research, Julio Moreno, notes a key distinction:
- Current Net Profits: +20,000 BTC
- Bull Market Threshold: 130,000 to 200,000 BTC
Because the current profit levels are far below historical bull market transitions, the current price action is still classified as a bear market rally.
Unrealized Profits and Correction Risks
Unrealized profit margins currently sit at approximately 18%. This is a massive recovery from the -29% unrealized losses seen earlier this year. Historically, when unrealized profits rise this high, the risk of a market correction increases as more investors look to lock in their gains.
Why a Correction Might Wait
Despite the risks, a price drop may not happen immediately. Several factors are currently supporting the price:
- High Demand: Growing demand for perpetual futures.
- Stable Spot Market: Only a mild contraction in spot demand.
- Low Exchange Inflows: Investors are not yet rushing to move their coins to exchanges to sell.
Current Bitcoin Market Status
Bitcoin is currently trading near $80,180. While the rally has restored confidence to many, the “meaningful correction risk” remains high. Analysts suggest that while the rally has strength, it has not yet reached its peak distribution phase.
