Bitcoin’s rally to a one-month high near $74,000 earlier this week sparked a significant wave of profit-taking from short-term traders, according to on-chain data from CryptoQuant.

After briefly breaking above $70,000 on Wednesday, the largest cryptocurrency lost momentum and has since retreated to around $69,000.

CryptoQuant analyst Darkfost reported that short-term holders transferred more than 27,000 BTC—worth roughly $1.8 billion—to exchanges at a profit in the past 24 hours. The surge in transfers represents one of the largest bursts of realized gains in recent months.

Currently, the only short-term investors still in profit are those who accumulated Bitcoin between one week and one month ago, with a realized price close to $68,000. This suggests that some recent buyers are opting to lock in gains rather than extend their positions.

Short-term holders are typically the most reactive group in the market, and the latest selling activity reflects ongoing caution amid geopolitical tensions involving Iran.

Earlier this week, analysis from CoinDesk pointed to the risk of a potential bull trap, noting similarities to January’s price action when bitcoin briefly surged to $98,000 before reversing sharply lower.

That pullback materialized on Friday and was amplified by comments from Donald Trump demanding Iran’s unconditional surrender—remarks that also drove oil prices sharply higher.

Despite the recent profit-taking, broader market dynamics continue to support bitcoin’s rally, according to Adrian Fritz, chief investment strategist at 21Shares.

Fritz said traders are increasingly speculating that the Clarity Act—a U.S. digital asset market structure bill—could pass before the end of the year. Prediction markets currently estimate the probability at about 70%, although Fritz noted that these markets remain relatively illiquid.

He also highlighted rising geopolitical tensions and sustained institutional demand as key factors underpinning the market.

Some investors are beginning to treat bitcoin as a “gold beta” trade, rotating into the digital asset after the recent rally in Gold. Meanwhile, spot bitcoin exchange-traded funds have remained relatively resilient, with holdings down only about 5% during the latest pullback while still recording more than $700 million in net inflows this week.

While political developments may have helped ignite the move, Fritz said the rally is increasingly being sustained by geopolitical hedging and growing institutional confidence in bitcoin.