The Bitcoin price opened the week with a solid performance, climbing back above $90,000 following the announcement of a strategic crypto reserve by US President Donald Trump. However, the leading cryptocurrency struggled to maintain this momentum, falling back below the $90,000 mark before the week’s midpoint.
The current market volatility is reflected in Bitcoin’s price movements, as it has largely traded sideways (after an initial surge) within the range of $82,000 to $92,000. The pressing question now is — what is driving the ongoing price retracement and consolidation?
Short-Term Sell-Offs vs. Long-Term Confidence: Analyst Insights
In a Quicktake post on the CryptoQuant platform, an analyst known as ShayanBTC explored the varying behaviors of investors using on-chain data to assess the current market sentiment. The key on-chain metric here is the Spent Output Age Bands (SOAB), which categorizes spent coins based on their age relative to the total coins moved.
ShayanBTC focused specifically on the holdings of investors within the 1-week to 6-month range (short-term holders) utilizing the Spent Output Age Bands. Data from CryptoQuant indicates that the selling actions of short-term investors have been responsible for the recent downturn in Bitcoin prices.
These short-term investors, known for their quick responses to market shifts, have been actively transferring BTC to exchanges, correlating with increased selling pressure. Given their sensitivity to market sentiment and resistance levels, their selling attitude aligns with Bitcoin’s recent difficulty in maintaining bullish momentum.
Source: CryptoQuant
Conversely, long-term investors (those holding BTC for over 6 months) have exhibited no signs of capitulation. While there is some evidence of profit-taking, it appears to be gradual and aligns with patterns typical of healthy bull markets, rather than widespread liquidation.
The behavior of long-term Bitcoin investors indicates that they are expecting future price increases before releasing larger portions of their holdings, consequently reducing the BTC supply in the market. ShayanBTC noted, “if sufficient demand emerges, this supply reduction could lead to further price increases.”
Interestingly, recent on-chain data reveals that Bitcoin’s long-term investors are not the sole group restraining from selling their assets. Crypto expert Ali Martinez shared on X that Bitcoin miners have recorded no selling activity since February 28.
Bitcoin Price Overview
At the time of writing, the leading cryptocurrency is priced at approximately $86,200, indicating a slight decline of 0.5% over the past 24 hours.
The BTC price on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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