Crypto traders are taking a more defensive posture amid speculation long-term holders are offloading tokens with Bitcoin trading just below all-time highs.

The largest cryptocurrency by market value was down about 2% to $116,200 on Friday, or around 5.7% below the record of more than $123,000 reached on July 14. Smaller tokens fared worse, with XRP and Dogecoin both down more than 5%.

The pullback has cooled expectations that so-called alternative digital currencies are poised to outperform the market bellwether following its recent record breaking run.

Close to $400 million in long positions were liquidated in the last 24 hours — Bitcoin leading the cuts with $159 million, according to data compiled by researcher Coinglass.

The crypto market’s decline is “a healthy and necessary correction” from previous highs, according to Alex Kuptsikevich, chief market analyst at FxPro. The total value of all cryptocurrencies in circulation briefly topped $4 trillion in July, according to CoinGecko data.

Even a decline to the $3.4 trillion mark would be viewed as profit-taking, Kuptsikevich said in a note on Friday. “As long as the market remains above this level, there is no point in talking about a change in the medium-term trend,” he added.

Bearish sentiment was also evident in the derivatives market where an unidentified speculator paid about $5 million in premium on the Deribit exchange to buy Bitcoin put options expiring on Aug. 8 at the strike price of $110,000, according to prime broker FalconX, which facilitated the trade.

“We expect to see further consolidation while Bitcoin remains below monthly trendline resistance, currently at around $125,000, which capped Bitcoin’s advance last week,” said Tony Sycamore, an analyst at IG Australia.

Still, most crypto observers remain bullish over the longer term. Citigroup analysts wrote in a note this week that they estimate Bitcoin could hit $135,000 by the end of the year.

“The broader uptrend remains intact, but momentum has cooled and traders are cautious,” said Rachael Lucas, a crypto analyst at BTC Markets.

— With assistance from Suvashree Ghosh and Emily Nicolle

Updated, July 25, 2025: Freshens up article for U.S. audience.

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