Bitcoin Price Plummets Amid Short-Term Holder Capitulation: Analysts’ Insights
Bitcoin’s price is under pressure due to short-term holder capitulation, with many selling at a loss. Analysts from Glassnode indicate a weak accumulation trend and concerns over demand, mirrored by a previous crash in August 2024. A consolidation phase may follow as the market seeks firm support.
Analysts from Glassnode report that Bitcoin is experiencing heightened selling pressure due to a wave of capitulation among short-term holders. As these investors begin to sell their coins at a loss, similar to previous market downturns, it has exacerbated the bearish sentiment surrounding Bitcoin’s price. Notably, since January, there has been a persistent weakness in the accumulation trend, indicating that new buyers are hesitant to enter the market and absorb the sell-off.
Currently, Bitcoin’s price has decreased from $108,000 to $93,000, prompting concerns about diminishing demand. The decline has coincided with a decline in market confidence, especially following external risks such as the Bybit cyberattack and increasing tariff tensions in the United States, as reported on March 11. At this stage, analysts note, “Unlike the earlier phase, there was no significant dip-buying response this time, indicating that sentiment had shifted toward risk aversion and capital preservation rather than continued accumulation.”
The data further reveals that short-term holders are disproportionately affected by the current market conditions. Since Bitcoin fell below $95,000, recent purchasers have largely been selling at a loss. During this downturn, the short-term holder spent output profit ratio, a measure of profit versus loss upon sale, reached 0.97 during Bitcoin’s drop to $78,000, showcasing significant investor panic.
Additionally, the metric for short-term holder coin days destroyed underscores the magnitude of panic-driven selling, having fallen to -12.8K coin days per hour, suggesting intense loss realization. Glassnode emphasizes that a similar selling pattern was observed in August 2024, when Bitcoin plunged to $49,000 amid market stress. Presently, the structure indicates that we may be facing another capitulation phase.
As Bitcoin now hovers near critical cost-basis levels, analysts propose that the market may enter a consolidation phase, awaiting stronger support before any potential recovery can take place.
In summary, Bitcoin’s current decline is primarily influenced by the capitulation of short-term holders, reflecting a significant shift in market sentiment towards risk aversion. The recent selling activity, devoid of substantial buyer support, highlights a critical moment for Bitcoin’s valuation. Analysts suggest that continued observation is necessary, as Bitcoin approaches key price levels that may dictate its future trajectory.
Original Source: crypto.news
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