Key Points
- Bitcoin’s price is being driven down due to short-term holder capitulation, according to Glassnode.
- Weak accumulation trend since January and external risks are also contributing to the bearish pressure.
A surge in capitulation from short-term holders is currently pushing the price of Bitcoin (BTC) downwards, intensifying the bearish pressure, as per Glassnode’s analysis.
Short-term Holders Selling at a Loss
Bitcoin’s price is under significant selling pressure as short-term holders have begun to sell their coins at a loss, a pattern reminiscent of previous market downturns. This has been detailed in a research report by Glassnode.
The accumulation trend has been weak since January, indicating that buyers are not stepping in to counteract the sell-off.
Bitcoin’s fall from $108,000 to $93,000 corresponds with this decline, raising concerns about diminishing demand. The confidence in the market further deteriorated in late February due to external risks such as a cyberattack on Bybit and escalating U.S. tariff tensions.
Impact on Short-term Holders
Data indicates that short-term holders are bearing the brunt of Bitcoin’s price drop. Since the price dipped below $95,000, most recent buyers have been selling at a loss. The selling pressure was at its peak when Bitcoin fell to $78,000, pushing the short-term holder spent output profit ratio to 0.97, highlighting the extent of the panic.
Another important metric, short-term holder coin days destroyed, verifies the panic selling. Glassnode noted that the recent sell-off by major buyers has significantly impacted this indicator, reflecting severe loss realization and a moderate capitulation event.
A similar pattern was observed in August 2024, when Bitcoin dropped to $49k amid market stress and macro uncertainty. The current structure suggests a similar capitulation phase.
As Bitcoin is currently trading close to key cost-basis levels, the analysts proposed that the market might enter a consolidation phase before establishing solid support.
