Key Points
- Bitcoin buyers from the last month were significantly affected during recent crypto market sell-offs.
- Despite the selloffs, Bitfinex analysts believe a bullish outcome remains possible if the right factors align.
Bitfinex analysts have observed that recent buyers of Bitcoin have been the most affected in the recent crypto market downturns.
Bitcoin’s Recent Decline
Bitcoin has lost 13.5% of its value in the last 30 days and has seen a drop of over 29% from its all-time high set in January.
This is considered the most significant correction of the current bull cycle, as per the Bitfinex Alpha Report released on March 17.
Previous cycles have also seen similar drawdowns ranging from 30% to 50%.
Despite this, some expected a different result this time due to the recent institutional adoption through spot BTC exchange-traded funds on Wall Street.
U.S. spot BTC ETFs have witnessed rapid growth, reaching over $100 billion in assets under management within a year.
Short-term Bitcoin Holders Affected
The cash allocated to these ETFs has been decreasing over the past few weeks, with consecutive outflows setting records.
Last week, nearly $1 billion exited these products, indicating that “institutional buyers have not yet returned with sufficient strength to counteract selling pressure,” as per Bitfinex analysts.
The lackluster price action has also impacted the crypto sentiment.
Metrics like the Fear & Greed index have dropped to multi-year lows, increasing sell-side pressure as short-term holders capitulated.
Data from IntoTheBlock supports Bitfinex analysts’ claims, showing that 20% of all BTC holders are in unrealized losses.
Potential for a Turnaround
Despite the current downturn, Bitfinex analysts believe a bullish outcome is still possible under the right circumstances.
The key factor is whether long-term holders or institutional demand re-emerge at these lower levels.
If investors with deeper pockets begin absorbing supply, it could signal a shift back toward accumulation, potentially stabilizing price action and reversing sentiment.
