Key Points
- Bitcoin’s price struggles to maintain above $100k, indicating market indifference and shrinking profit margins.
- According to CryptoQuant, the $100k price level is crucial for restoring market confidence and avoiding panic selling.
Bitcoin’s [BTC] performance over the past week has been less than stellar, with the cryptocurrency struggling to stay above the $100k mark. This trend indicates a growing market indifference, as sellers are strategically entering the market to either take profits or prevent further losses. Currently, BTC is trading below $100k for the fourth consecutive day, a first for 2025.
Importance of the $100k Threshold
CryptoQuant’s analyst, Crazzy, emphasizes the significance of the $100k price level for Bitcoin. This level is pivotal for short-term holders to turn profitable. Those who have held BTC for less than a month are currently operating at a 3% loss. Similarly, holders for less than six months have seen their profit margins shrink from 30% in November 2024 to 7% at present.
The dip in Bitcoin’s price does present an opportunity for new buyers to enter the market. However, for market confidence to be restored, BTC needs to hold above the $100k mark. If it fails to do so, investors may suffer further losses, leading to reduced investor sentiment and potential panic selling.
Bitcoin’s Recovery Possibilities
Despite struggling to reclaim higher resistance levels, the market has not yet peaked. AMBCrypto’s analysis suggests that Bitcoin is currently experiencing a healthy retracement before the next surge. Thus, there is still potential for BTC to register more gains.
The supply of Bitcoin held by long-term holders (LTHs) has been steadily increasing, indicating that LTHs are not panic selling and may continue to accumulate. This trend is further supported by the fact that the LTH SOPR (Spent Output Profit Ratio) has remained above 1 at 1.8, indicating a slowdown in profit-taking by LTHs and no signs of panic selling.
Moreover, the selling pressure among active participants has decreased, as evidenced by reducing exchange inflows. In fact, netflows have returned to negative territory, suggesting a shift in sentiment to bullish.
While LTHs have not lost confidence, it is crucial for Bitcoin to avoid further losses. The current market conditions show that LTHs are supporting the market, while short-term holders are either at a loss or have low profits. A trend reversal could strengthen the conviction of LTHs and restore the confidence of short-term holders.
In essence, for a bullish outlook to hold, Bitcoin will need to break out and reclaim the $100k mark.