Profit taking during a bull market is usually a bullish signal, reinforcing the strong incentives for HODL.
From a technical perspective, Bitcoin [BTC] The breakout above $80,000 naturally led to heavy profit taking, after almost 13 weeks of trading below this level. This indicates that many short-term holders have made meaningful gains after BTC’s volatile first quarter, which fell 22%.
That said, profit realization is not limited to short-term holders. As the chart below shows, when BTC went from $78,000 to $80,000, the 2-3 year holding group, consisting of investors gathered before the ETF’s launch, accelerated profit taking to over $209 million per hour, capturing gains of approximately 60%-100%. In short, long-term holders use price strength to distribute market liquidity.
Interestingly enough, the story doesn’t end there.
According to data from Santiment, Bitcoin’s net realized gain on May 3 was +$207.56 million, the highest level in a month. Technically, this coincided with BTC closing around $78.5k with only a small pullback of 0.16%. Despite heavy profit taking, price action remained steady, indicating underlying strength.
Against this backdrop, short squeezes are not surprising. According to Coinglass, Bitcoin’s 24-hour liquidation heatmap shows that short liquidations dominate by more than 60%, almost the $100 million mark. Therefore, tThe main question now is whether BTC’s strength comes mainly from short squeezes or from real spot demand.
$80,000 turns into Bitcoin’s decision zone
When Bitcoin breaks through a major resistance level, a bull versus bear battle usually ensues.
This time it is no different. Bitcoin’s 12H liquidation heatmap shows both long and short liquidity stacked around the $78k-$81k zone, with an average of $60 million in leveraged positions spread across four major clusters. Technically, this indicates that both bulls and bears are heavily positioned, waiting for BTC’s next move.
Particularly with aggressive profit taking, it appears that bears have a slight edge. However, ETF flows continue to absorb the selling pressure. As the chart below shows, Bitcoin spot ETFs have already attracted $1.16 billion in net inflows this month, following a strong April period that brought in nearly $2 billion, the largest monthly inflows of 2026 to date. At this rate, May could potentially surpass April’s inflow momentum.
From a psychological perspective, this setup ensures that profit-taking continues to occur in a bullish context.
The logic is simple: as long as demand continues to absorb supply, profit-taking keeps FOMO alive, encourages holders to HODL, and pushes Bitcoin’s cost basis higher. New buyers coming in around $80,000 are unlikely to panic sell at $79,000 as they are just positioned, allowing a stronger support floor to be built under the price.
As a result, the current setup is leaning bullish, with the next possible move towards the $87,000 – $92,000 range.
Final summary
- Profit taking remains healthy and not bearish as strong ETF inflows and steady demand continue to absorb selling pressure around the $80,000 cost zone.
- The market structure is leaning towards bullish, with liquidity positioning and stronger support from holders opening up a potential move towards the $87,000 – $92,000 range.