Bitcoin’s market capitalization has once again climbed past the $2 trillion mark, fueled largely by a sharp rally that pushed its price beyond $100,000. While the milestone signals strong bullish sentiment, particularly among new retail entrants, on-chain data suggests the underlying market dynamics are far more nuanced.
According to insights from blockchain analytics firm Glassnode, the surge is being driven by first-time buyers, while experienced traders and institutional momentum buyers are treading cautiously - raising questions about the sustainability of the rally.
Bitcoin’s rally past $100,000 last week brought its total market capitalization to levels not seen since January 2025. The psychological significance of this threshold has prompted a new wave of interest, particularly from individual investors entering the market for the first time. Glassnode’s “BTC Supply Mapping” tool shows that the Relative Strength Index (RSI) for first-time buyers has remained at a maximum reading of 100 for an entire week - an indicator of consistent, high-volume purchasing activity from newcomers.
This surge in demand from retail buyers is often driven by "FOMO" - the fear of missing out - which tends to intensify during new all-time highs or notable bullish price action. In these phases, speculative activity increases as the broader public becomes more aware of market gains and is drawn in by the prospect of fast profits.
Weak Momentum Among Seasoned Traders
Despite the renewed retail enthusiasm, data from Glassnode paints a more cautious picture among more experienced market participants. Momentum buyers - traders who typically build positions based on the continuation of strong price trends - are showing weak engagement. The 30-day RSI for this group is hovering around 11, suggesting a notable drop in conviction or interest compared to earlier stages of the bull market.
This divergence raises red flags about market sustainability. While fresh retail inflows can propel price action in the short term, lack of follow-through by momentum buyers and institutions typically leads to price stagnation or even correction. According to Glassnode, if inflows do not continue at their current pace, the market may enter a period of consolidation or experience a near-term pullback.
Growing Profit-Taking Behavior
Adding another layer of complexity is the rise in profit-taking activity. As Bitcoin hit a six-figure price tag, many long-time holders and speculative traders appear to be cashing in. This is typical in extended bull cycles, where early participants start exiting their positions gradually, locking in gains before market sentiment shifts.
Glassnode’s data supports this trend, showing that profit-taker activity is accelerating even as new buyers flood in. This transition of supply from older to newer hands can indicate a maturing rally - but it also places pressure on price stability, especially if demand does not continue at the current rate.
The timing of Bitcoin’s rally coincides with broader macroeconomic factors, including investor anticipation around upcoming U.S. inflation data and the Federal Reserve’s policy stance. With rate cuts still expected later in 2025, risk assets like Bitcoin are experiencing renewed interest as investors seek higher-yielding alternatives to traditional markets.
Additionally, inflows into U.S.-based Bitcoin ETFs - particularly the spot products approved earlier this year - have added a layer of structural demand to the market. These vehicles, which offer regulated access to Bitcoin exposure, have driven substantial institutional interest and may be influencing price indirectly, even if day-to-day volatility continues to be shaped by retail trading behavior.
On-Chain Activity Divergence: A Sign of Market Maturity?
The divergence between new buyer activity and momentum trading behavior may also reflect a broader maturation of the market. Whereas earlier cycles were largely driven by speculative euphoria, the current environment is more fragmented. Institutional participants, which typically rely on macro indicators and risk-adjusted models, are behaving cautiously, while individual investors are more reactive to price movements and media headlines.
The current split may indicate that Bitcoin is entering a phase where the sources of demand are increasingly diversified - but also less synchronized. This asynchronous behavior can lead to volatile price action, particularly when one cohort (e.g., retail) is highly active while another (e.g., institutions) sits on the sidelines.
Should the current momentum stall, consolidation may manifest in a variety of ways: prolonged sideways trading, a shallow correction, or increased volatility driven by conflicting trading behaviors. For Bitcoin to break further into new highs with lasting strength, both new and seasoned capital must engage in tandem.
Glassnode’s metrics suggest that without renewed interest from momentum buyers and institutions, Bitcoin’s short-term price action may level off as profit-taking and risk-off behavior balance out inflows from FOMO-driven newcomers.
Final thoughts
Bitcoin’s performance often serves as a barometer for the broader crypto market, and its recent $2 trillion valuation could have ripple effects across other digital assets. Altcoins often rally in the wake of strong Bitcoin performance, but they can also suffer disproportionately during corrections.
The split between retail exuberance and institutional caution is likely to impact how capital flows across the ecosystem. Ethereum, Solana, and other large-cap altcoins could benefit from spillover effects, while smaller cap assets may see increased volatility as traders rotate funds in search of higher short-term returns.
Furthermore, the underlying dynamic of institutional disengagement could have broader implications for decentralized finance (DeFi), which has seen uneven capital allocation during this bull cycle. Platforms relying on liquidity mining or yield farming may be less attractive if Bitcoin consolidation triggers a risk-off sentiment across crypto.
Unlike previous cycles, Bitcoin’s rise in 2025 is occurring under vastly different structural conditions. Spot Bitcoin ETFs are now a reality, Bitcoin mining rewards have been halved again, and major sovereign entities are holding BTC in reserves. These factors provide both a cushion and a new set of variables that could impact market behavior.
The presence of more sophisticated trading infrastructure - ranging from institutional-grade custody to derivatives markets - means that the reaction to consolidation or corrections may be more orderly, but also potentially more impactful if key levels are broken.
Bitcoin’s climb past the $2 trillion market cap is a significant milestone that reflects both renewed enthusiasm and lingering skepticism. While on-chain data confirms the influx of new buyers, the hesitation from momentum-driven and professional traders suggests the rally may be vulnerable without broader market support.
As macroeconomic conditions evolve and regulatory clarity improves in major jurisdictions, the next few weeks will likely be pivotal in determining whether Bitcoin’s rally gains further traction or pauses for consolidation. For now, the market stands at a crossroads: powered by retail energy, but in need of deeper conviction to break sustainably into uncharted territory.