While U.S. equities continue to defy gravity, some analysts warn that the current rally may be running on fumes, and that Bitcoin could soon feel the aftershocks.
Crypto trader DaanCrypto noted that equities have been propped up largely by a wave of AI-driven spending announcements, creating what he described as a “massive circle of future spending” holding tech valuations aloft. However, he believes a short-term cooldown would be both “healthy and necessary” for markets to reset before the next liquidity-driven expansion.
“It’s getting a bit insane,” Daan wrote. “Company sells off on earnings, company mentions AI, and it’s back up again.”
He suggested that a 10% correction in equities could allow both traditional and crypto markets to “refuel,” possibly setting the stage for a broader rebound.
Bitcoin May Lead the Next Move
Despite the equity overextension, Daan emphasized that Bitcoin often leads traditional markets both on the way down and during recoveries. In his view, a brief cooling period could help flush out weak hands before the next major rally, especially if the Federal Reserve resumes quantitative easing (QE) in 2026.
“The moment we see proper liquidity injections and further rate cuts is when Bitcoin and crypto can shine,” he added.
For now, however, the near-term picture remains shaky.
On-Chain Data Shows Short-Term Holder Stress
According to on-chain analyst Darkfost, Bitcoin’s short-term holders (STHs) continue to capitulate. Data from CryptoQuant shows around 28,600 BTC being sent to exchanges at a loss, a sign of mounting pressure among traders who bought near recent highs.
The Spent Output Profit Ratio (SOPR) for short-term holders remains near 1, indicating that many investors are either selling at breakeven or realizing minimal losses. Each time Bitcoin’s price attempts to recover toward the realized price of ~$112,500, profit-taking tends to resume, capping upside momentum.
“Short-term holders are in doubt,” Darkfost concluded, warning that further capitulation could still occur before a true bottom forms.
Market Outlook
Both analysts agree that liquidity remains the decisive driver for Bitcoin’s next major move. Until global liquidity expands again, through rate cuts, fiscal spending, or renewed ETF inflows, price action may remain choppy and sentiment fragile.
Still, Daan sees any sharp dip as a buying opportunity before the next macro phase begins: “The longer markets keep going like this, the more unsustainable it gets. A reset would be healthy.”
