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 market pullback tests investor attitudes after a previous week filled with enthusiasm concerning U.S. cryptocurrency legislation. Despite this shift, ongoing interest from exchange-traded funds (ETFs) and steady macroeconomic conditions might indicate a healthy adjustment rather than a trend reversal, affecting billions in the market’s value.

Cryptocurrency prices retreated as the excitement of “crypto week” subsided, with investors seizing opportunities to secure profits from recent rallies linked to forthcoming regulations and the possibility of integrating digital assets into retirement accounts.

• 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.

Quick Overview: During the week, there was a noticeable shift toward altcoins such as DOGE, SUI, ADA, AVAX, and UNI, which experienced significant gains, unlike Bitcoin, which underperformed. President Trump is poised to sign the GENIUS Act, marking the first major federal regulatory action concerning stablecoins. Meanwhile, macroeconomic statistics indicated a reduction in inflation expectations, yet consumer sentiment remains pessimistic, showing a 16% decline since 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.