Bitcoin slipped below $118,000 on Friday amid profit-taking, while ETH and XRP pared gains, but Coinbase analysts say the crypto rally remains structurally sound with room for further upside.

This pullback tests investor sentiment after a week of optimism over U.S. crypto legislation, but sustained demand from ETFs and stable macro conditions could signal a healthy correction rather than a reversal, impacting billions in market value.

Crypto prices cooled as “crypto week” hype faded, with investors locking in profits from recent surges tied to potential laws and retirement account access for digital assets.

• Bitcoin fell to $117,500, down 0.6% in 24 hours and flat week-over-week after hitting near $124,000 Monday.
• Ether surged to near its 2025 high of $3,700 before retreating to $3,550, still up 4.5% daily and over 20% weekly.
• XRP hit a new all-time high of $3.60 overnight but dropped below $3.4, retaining a 4% daily and 35% weekly gain.

Catch up quick: The week saw rotation into altcoins like DOGE, SUI, ADA, AVAX, and UNI, posting double-digit gains while Bitcoin lagged. Trump is set to sign the GENIUS Act, the first major federal crypto regulation focused on stablecoins. Macro data showed cooling inflation expectations but persistent consumer pessimism, with sentiment down 16% from December 2024.

The intrigue: Despite the dip, the CoinDesk 20 Index briefly hit a record 4,133 before falling 3.7%, reflecting broad-market strength amid altcoin outperformance and no signs of excessive speculation in derivatives.

Between the lines: Coinbase highlights on-chain data and global liquidity supporting risk assets, suggesting this rally is driven by accumulation and structural demand rather than hype, contrasting with past boom-bust cycles.

What they’re saying:

• “Pullbacks may occur, but we think current on-chain and market signals argue that bitcoin’s advance stands on solid ground rather than late-cycle euphoria,” Coinbase analysts, led by David Duong, said in a Friday report.
• “The current rally is powered by structural strength and steady accumulation, not runaway speculation,” the Coinbase team noted, pointing to balanced derivatives markets and ETF inflows.

The bottom line: While short-term volatility is expected, Coinbase’s outlook points to more gains for Bitcoin and alts if legislative tailwinds persist, though elevated inflation expectations could cap broader risk appetite.