Bitcoin Approaches $98,000 as Holder Behavior Signals a Critical Test

Market Overview - Bitcoin's price has recently recovered, reaching a two-month high near $97,500, indicating a shift towards cautious optimism in the market [2][6] - The ongoing rise in Bitcoin's price is accompanied by a decline in retail participation, with a net drop of 47,244 holders, suggesting smaller investors are exiting due to fear, uncertainty, and doubt (FUD) [2][5] Exchange Dynamics - Exchange balances have fallen to a seven-month low of approximately 1.18 million BTC, which typically signals lower immediate selling pressure [3] - This decline in exchange balances has coincided with price stabilization, reinforcing confidence that Bitcoin may be forming a local bottom [3] Profitability and Holder Behavior - Short-term holders are regaining profitability dominance over long-term holders, with short-term holder profits reaching their highest levels since January 2023 [4][5] - Elevated short-term profitability can indicate improving demand but also poses a risk as these holders may be more likely to sell, potentially slowing Bitcoin's recovery [5] Technical Analysis - Bitcoin is currently trading near $95,372 within an ascending broadening wedge, which could have bullish implications if a breakout occurs [6] - A confirmed breakout would require Bitcoin to reclaim the $98,000 level and successfully retest it as support, with holding above the $95,000 psychological level being critical for further upward movement [6][7]