Key Points
- Bitcoin [BTC] has remained below $85k, marking a potential stabilization point.
- Short-term holders selling BTC at a loss could complicate recovery efforts.
Bitcoin’s Potential Stabilization
Bitcoin [BTC] has maintained a position below $85k following a brief dip to $76k. Bitfinex exchange analysts suggest this could signal stabilization. The weekly market report highlighted traders experiencing a daily realized loss of $818 million, a pattern typically seen before a potential market bottom.
Despite this, short-term holders have been offloading BTC at a loss for the first time since October 2024. If this trend continues, it could hinder reversal attempts. The Bitcoin Spent Output Profit Ratio (SOPR), which measures traders’ profitability, has fallen below 1, indicating that holders are selling at a loss.
Recovery Efforts and Market Trends
For a recovery shift to occur, Bitfinex analysts assert that the SOPR must rise above 1 again, signaling ‘re-accumulation’ and ‘bullish continuation’. However, weak BTC demand supports Bitfinex’s caution. Data from CryptoQuant shows that demand for the cryptocurrency has been negative since late February.
U.S. spot BTC ETFs have lost $1.5 billion in the first half of March, and $3.56 billion in February, according to Soso Value. This totals over $5 billion in losses over the past 6 weeks. Bitfinex analysts also warn that mixed readings on U.S macroeconomic factors could impact crypto markets.
Despite the tariff wars initiated by Trump, U.S CPI inflation data for February was lower than expected. The market does not anticipate any Fed rate cut in the upcoming FOMC meeting on 19 March. Interest traders have priced in a 97% chance that the Fed will maintain the current rate target of 4.25%-4.50%. This leaves only a 3% chance of a 25bps rate cut at the next FOMC meeting. As a result, BTC could remain in turbulent waters in the short term.
