Key Points
- Despite a recent price dip, Bitcoin’s selling pressure from short-term holders is slowing down.
- Long-term holders remain largely inactive, indicating a strong conviction and potential market stabilization.
Bitcoin’s price took a hit following the latest inflation report, leading to a significant dip. But, an interesting shift is happening beneath the surface.
The volume of Bitcoin spent at a loss by short-term holders has considerably slowed, despite the recent price decline.
Bitcoin and Inflation
The February inflation report cast doubt on a near-term Federal Reserve rate cut, sending shockwaves through the market.
Bitcoin briefly dipped below $95,000 before finding support and rebounding to around $96,000. This drop coincided with a broader sell-off in risk assets, including Bitcoin-related stocks like MicroStrategy.
Stabilizing Market?
Despite Bitcoin’s dip, on-chain data suggests that selling pressure from short-term holders is easing.
The volume of Bitcoin spent at a loss by these holders has declined from its early February peak of 5.5K BTC to 3.8K BTC. This slowdown in panic selling points to market stabilization, with weaker hands likely having already exited.
Moreover, long-term holders remain largely inactive, indicating a strong conviction. This lack of capitulation among them suggests that the recent dip has not sparked widespread panic.
If this trend continues, Bitcoin may find stronger support near current levels, potentially setting the stage for recovery once sentiment improves.
