The recent downturn in Bitcoin’s price has prompted a wave of selling among short-term holders, as many rushed to exit their positions amid mounting losses.
Recently, Bitcoin tumbled from a high of $96,500 to a low of $86,050, marking its lowest level in three months. This sharp decline resulted in realized losses amounting to $1.7 billion—not seen since August 2024, when short-term investors endured losses exceeding $2.4 billion, according to on-chain analytics firm CryptoQuant.
Signs of Capitulation Amid Market Uncertainty
Commenting on these developments, renowned crypto analyst Miles Deutscher identified these sell-offs as another potential capitulation event. He pointed to the Fear and Greed Index, which recently dropped to levels last recorded in October 2024, reflecting growing anxiety among investors.
“Market sentiment is shifting towards fear once again,” Deutscher noted, adding that such periods of uncertainty often precede market bottoms.
However, not all analysts are convinced that the worst is over. Geoffrey Kendrick, who leads digital asset research at Standard Chartered, believes that Bitcoin has yet to experience a full-scale capitulation. In a recent note to investors, he cautioned that additional sell-offs in Bitcoin’s value could be sparked by ongoing withdrawals from Bitcoin exchange-traded funds (ETFs).
ETF Outflows and Market Implications
On February 25, Bitcoin ETFs witnessed nearly $1 billion in net withdrawals, the largest single-day outflow on record. Kendrick highlighted that investors who purchased Bitcoin through ETFs since the U.S. election are now collectively on roughly $1.3 billion in losses. Since the average purchase price is approximately $97,000, he warned that additional price drops could lead to a surge in selling.
“I believe a major liquidation event is still on the horizon,” Kendrick stated, advising investors to exercise patience before considering new entries.
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Key Support Levels to Watch
As Bitcoin struggles to regain momentum, on-chain data from Glassnode suggests that its next major support zone lies between $71,000 and $72,000. Should selling pressure intensify, Bitcoin may retest these levels before finding a stable footing.
As of the current report time, the price of Bitcoin is approximately $86,200, remaining close to its recently reached low point. Market participants continue to monitor whether the cryptocurrency can stabilize or if deeper corrections are in store.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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