Bitcoin has seen barely any significant price movement in the last 24 hours or even seven days. There was a pronounced sideways movement, which once again prevented Bitcoin traders from breaking out of the established range. Selling pressure was manageable, but so was the bullish momentum.
A directional decision remains pending. Bitcoin is currently trading at around $84,200.
While bearish signals are increasing, sentiment remains hopeful. What’s behind this?
Short-term Bitcoin traders in losses: Is panic coming?
The popular on-chain metric “In/Out of the Money” shows whether Bitcoin addresses are in the money or in the money. It compares the current BTC price with the average purchase price per address. If the price is higher, the address is in profit; if it is lower, it is in loss. This analysis helps assess potential selling pressure. Furthermore, supports and resistances can be identified here.
Meanwhile, crypto analyst Maartunn highlights that around 5.58 million Bitcoin addresses currently hold positions at critical price levels – positions that could become unstable if the price continues to fall. These wallets have purchased approximately 3.79 million BTC at prices above $87,000 and are currently at a loss. According to Maartunn, these are largely short-term investors who, statistically, are more likely to panic sell when the market comes under pressure. This behavior can increase selling pressure and lead to abrupt price corrections. According to Maartunn, the concentration of so many losing positions in the hands of fragile market participants increases the vulnerability of the current market environment.
If there is another significant pullback, panic among this cohort could lead to a final capitulation.
Bitcoin whales transferring BTC: New selling pressure?
However, even more important than short-term traders are sometimes the large investors, i.e., crypto whales. The Bitcoin Exchange Whale Ratio measures the proportion of the ten largest BTC inflows to total inflows on exchanges. A high value indicates that whales account for a disproportionate share of deposits. This can indicate impending sales, as exchange deposits are often interpreted as preparation for sales. The metric therefore serves as an early indicator of potential selling pressure from large investors.
According to recent data, the Exchange Whale Ratio has risen to its highest level in a year. This means that large investors currently account for an exceptionally high share of BTC inflows to exchanges. If this trend continues, short-term price corrections could follow – whales may be dumping some of their Bitcoin.
Bitcoin Forecast: Sentiment Exaggerated – Is a Recovery Coming?
Sentiment remains gloomy. The CoinMarketCap “Fear and Greed” indicator is at 21. This puts sentiment not far from its annual lows, despite the recent moderate recovery.
Consequently, there has recently been a decline in market sentiment toward Bitcoin. Many investors and traders are now skeptical of the short-term outlook. This is also clearly reflected in the “Bitcoin Sentiment Vote – Up or Down” chart, where significantly more market participants expect a negative development. The current sentiment index has returned to the level of September 2024 – according to the following analyst, the phase before the start of the last major uptrend. Historically, such periods of pessimistic sentiment have often been a contraindication to impending positive market movements.
Despite increased skepticism, the return to bearish sentiment parallels earlier beginnings of a recovery. Broad-based pessimism was often seen as a sign that many market participants had already sold – a bottom might be forming. The market often moves contrary to the majority opinion.
At the same time, however, the behavior of short-term traders and whales remains critical: Both groups are currently more likely to sell in times of uncertainty and quickly reduce their positions. This constellation is creating short-term pressure on Bitcoin but holds potential for a trend reversal in the medium term.
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