- In the dusty corners of the digital frontier, Bitcoin has tumbled below the cost basis for those short-term holders, those brave souls who dared to hold for less than 155 days.
- Heavy outflows from ETFs have contributed to this recent fall, like a storm cloud gathering over a parched land, and the downtrend could very well continue its relentless march.
The Bitcoin [BTC] Fear and Greed Index, that fickle beast, showed a reading of 26, still steeped in fear. It was a slight improvement from the previous day’s reading of 20, which was akin to a heart-stopping plunge into the abyss of extreme fear.
This sentiment, dear reader, was birthed from BTC’s staggering 13.8% drop in the past nine days, a veritable rollercoaster of despair.
In a post on CryptoQuant, the analyst Axel Adler, with a twinkle of irony in his eye, pointed out that our short-term holders (STHs) were nursing modest losses, like a farmer watching his crops wither in the sun.
On average, they found themselves 6.4% below the cost basis, which hovered around $90.5k, according to the ever-watchful CQ data.
Where is Bitcoin headed next?
Adler, with the wisdom of a sage, observed that these STHs, suffering their modest losses, might just witness the market entering a period of consolidation and accumulation, if only the stars aligned.
But alas, this would require steady demand and a shift in the macroeconomic sentiment, which, like a stubborn mule, remained fearful and uncertain.
The US spot ETF flows, oh what a tale they tell! They showed heavy outflows over the past ten days, one of the primary culprits behind the losses Bitcoin faced over the past week.
Data revealed that on the 28th of February, there were inflows worth a meager $94.3, dwarfed by the monstrous $1.14 billion outflow on the 25th of February. A classic case of “what goes up must come down.”
Sentiment remained bearish, like a dark cloud hanging over a town that’s seen better days. It could take a while before the bulls regain control of the market. In the meantime, further losses loom like shadows at dusk, and traders and investors must brace themselves.
By definition, the MVRV ratio is the market value divided by the realized value, a mathematical dance that focuses on holders who have clutched their BTC for less than 155 days.
A drop below 1 MVRV meant holders were at a loss, as has been highlighted earlier, a bitter pill to swallow.
In the previous cycle, after the BTC halving, the price did not dip below the STH cost basis until mid-May 2021, a time when hope flickered like a candle in the wind.
It dipped below the 1 standard deviation from the MVRV ratio and lingered there until July, before recovering in August, a tale of resilience.
A similar scenario may unfold once more. Bitcoin could see further losses and trend downward in the coming weeks, perhaps consolidating in the $65k-$70k region for a couple of months before the winds of fortune shift once again.
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2025-03-02 16:11