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Bitcoin’s recent price action has put significant stress on a particular group of investors. Long-term holders are looking relatively okay with Bitcoin’s recent price action, short-term participants, on the other hand, are starting to feel the heat. Market data now suggests that this cohort may be nearing a point of capitulation, but the bigger picture reveals a more complex story where short-term holders can still hang on.

Short-Term Holders Face Losses But Stay Within Limits

On-chain data shows that Bitcoin’s short-term holders (STHs) have incurred realized losses of $7 billion over the past 30 days. Short-term holders are addresses who have held BTC for less than 155 days. This trend is noted through data from on-chain analytics platform Glassnode, which pointed out that the run of losses marks the most prolonged loss event of the current market cycle. 

In addition to realized losses, unrealized losses have intensified, pushing many STH-held coins underwater. Glassnode’s analysis indicates that these losses are nearing the +2σ threshold, which is a level that has historically pointed to an increased risk of capitulation.

Image From X: Glassnode

Despite the mounting capitulation risk, history shows that short-term Bitcoin holders are not in the worst position they could be in. The current figures remain well below the $19.8 billion and $20.7 billion loss spikes witnessed during the 2021–2022 crash. 

Image From X: Glassnode

Although the losses are significant, they are still aligned with patterns seen in the middle of previous corrections during bull markets. This relates to a technical outlook from crypto analyst PlanB that Bitcoin is still in the middle of its bullish run.

Bitcoin Bull Score Plunges, ETF Outflows Pressure Sentiment

Although Bitcoin might still be mid-cycle, sentiment indicators paint a pressured picture, with the price down by 23% from its recent all-time high in January. Data from CryptoQuant reveals that Bitcoin’s Bull Score has dropped to 20, its lowest point in two years. Major price recoveries have only taken place when the Bull Score climbs above 60. This current low reading is a sign that the crypto market is still trapped in uncertainty, where sellers are currently outpacing buyers and momentum.

Image From X: CryptoQuant

A contributing factor has been the sustained capital outflow from Bitcoin exchange-traded funds. Since February, more than $4.4 billion has flowed out of spot Bitcoin ETFs. These outflows have added weight to an already fragile price structure after Bitcoin started correcting from its all-time high in January.

As such, short-term holders who entered close to this high and were banking on a continued upside have been exposed to most of the losses.

Image From X: Ali_Charts

Despite the heavy outflows that defined the past few weeks, there are early signs that this trend may be turning. Data from SosoValue shows that Spot ETF behavior shifted last week, with consecutive days of net inflows into spot Bitcoin ETFs. 

Image From SoSoValue

Particularly, Spot Bitcoin ETFs ended the week on a $744.35 million net inflow, bringing an end to five consecutive weeks of outflows. This return of institutional interest could be the first sign of stabilizing positive Bitcoin sentiment.

At the time of writing, Bitcoin was trading at $84,815.

Featured image from Pexels, chart from TradingView

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Crypto analyst Ali Martinez has shared some important insights into the current Bitcoin (BTC) market based on  UTXO Realized Price Distribution (URPD). Using this metric, the renowned market expert has highlighted key support and resistance levels with a potentially strong impact on BTC’s immediate price movement. 

Following another week of widespread market uncertainty, Bitcoin prices remain in consolidation, failing to make an effective breakout above $84,380.

Bitcoin Bull Run: $97,532 Holds Key To Renewed Bullish Momentum

In on-chain analysis, the Unspent Transaction Output (UTXO) represents the remainder of Bitcoin after every transaction which can be used as input in a new transaction. Therefore, the UTXO Realized Price Distribution allows analysts to identify price levels at which Bitcoin’s current supply was last moved. By highlighting price levels with high concentrations of UTXOs, the URPD is an important metric in discovering resistance and support levels.

In an X post on March 22 by Martinez, data from Glassnode shows a strong cluster of UTXOs around $83,444 indicating that many investors have their cost basis around this level. Currently, BTC’s price is well above this support level showing intent of a potential upswing. However, Martinez notes that a stiff resistance awaits market bulls at the $97,532 price level which also hosts a vast amount of UTXOs.

The analyst explains that a successful clearance of this resistance price level would signal a renewed bullish momentum in a BTC market that has undergone significant correction in the past few months. In a highly positive scenario, Bitcoin is likely to surge towards new all-time highs. However, failure to move past $97,532 may force BTC to remain in consolidation or even retrace to lower support levels.

Bitcoin Rearing To Resume Uptrend?

In other developments, Martinez has suggested Bitcoin’s current correction is likely still ongoing based on the Bitcoin Sharpe Ratio. For context, the Sharpe Ratio determines whether BTC’s returns are currently worth the level of risk involved at the moment.

The analyst explains that best market entries have occurred when the Bitcoin Sharpe ratio is at low risk, presenting a favorable buying opportunity. However, the current Sharpe ratio indicates high risk suggesting that prospective BTC investors might need to exercise patience.

Martinez said: 

We’re not there yet, but getting close might signal a prime buying window!

At the time of writing, BTC continues to trade at  $84,075 following a 0.27% price increase in the last 24 hours. However, the asset’s daily trading volume has crashed by 46.41% as market engagement falls.

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The US-based Bitcoin ETFs (exchange-traded funds) have been on a negative streak of capital outflows in the past few weeks, reflecting dwindling appetite and worsening sentiment amongst investors. However, the latest daily performances of these crypto-based financial products suggest that fresh demand might be growing among investors.

Bitcoin ETFs Close Positive Week With $83 Million Net Inflow

According to the latest market data, the Bitcoin ETFs in the United States continued their hot streak of capital influx, registering a daily total net inflow of $83.09 million on Friday, March 21. This fresh capital inflow marked the sixth consecutive day of net daily inflows for the crypto products.

On Friday, only two of the Bitcoin ETFs witnessed any form of investor activity. BlackRock saw the highest amount of value ($104.99 million) added to its exchange-traded fund iShares Bitcoin Trust (with the ticker IBIT); while Grayscale Bitcoin Trust (GBTC) posted a daily net outflow of $21.9 million to close the week.

Nevertheless, this $83.09 million performance brought the Bitcoin ETFs’ weekly record to a staggering $744.35 million weekly total net inflow. Interestingly, this previous week’s record put an end to five consecutive weeks of total net outflows from the exchange-traded funds.

Source: SoSoValue

Data from SoSoValue shows that the US Bitcoin ETF market witnessed a total withdrawal of $5.39 billion over those five weeks of negative outflows. Specifically, the crypto-based financial products witnessed a daily total net outflow of over $1.14 billion on February 25.

The magnitude of outflows witnessed by the Bitcoin ETFs has been associated with the uncertain climate of the US financial markets. Since the United States President Donald Trump resumed office, the markets have been plagued with fears of a global trade war, interest rate decisions, and so on.

Bitcoin Price Unreactive To ETF Inflows

Since their launch, there has been a discussion around the impact of US Bitcoin ETFs’ performance on the price of the flagship cryptocurrency. As seen in the recent consecutive weeks of net outflows, the Bitcoin price tends to struggle whenever ETF investors are leaving the market.

However, the premier cryptocurrency seems stuck in a consolidation range despite the fresh demand for the US Bitcoin ETFs. However, a sustained demand for its exchange-traded funds might be the positive catalyst for the Bitcoin price to resume its upward trend.

As of this writing, the price of BTC is hovering around the $84,000 mark, reflecting no significant change in the past 24 hours. According to data from CoinGecko, the market leader has barely recorded any notable movements in the past week.

The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView

Featured image from Shutterstock, chart from TradingView

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