Bitcoin Price Volatility: Can BTC Rebound After $818 Million Losses?

Bitcoin Price Volatility: What Does This Mean for the Future of BTC?

Bitcoin Price Volatility – Bitcoin (BTC) has remained below $85,000 on the charts after briefly dipping to $76,000, a move that analysts at the Bitfinex exchange believe could signal potential market stabilization. In their weekly market report, they highlighted that traders experienced a realized loss of $818 million per day, a phenomenon typically preceding a market bottom.

Widespread Capitulation and Stabilization

According to Bitfinex analysts, the current market flush, where such widespread capitulation occurs, often precedes market stabilization. However, they caution that geopolitical and macroeconomic concerns continue to hang over the market. This uncertainty has caused short-term holders (STH) to sell Bitcoin at a loss for the first time since October 2024, signaling that further price recovery could be challenging if this trend continues.

Bitcoin SOPR Indicates Losses for Traders

Bitfinex analysts pointed to the Bitcoin Spent Output Profit Ratio (SOPR), a key metric tracking traders’ profitability, which recently dipped below 1. This suggests that Bitcoin holders have been selling at a loss. The short-term holder SOPR recorded its second-largest negative print of this cycle at 0.95, indicating that new market entrants are capitulating.

Demand Weakness and Macro Concerns

The weak demand for Bitcoin corroborates Bitfinex’s warning. Data from CryptoQuant reveals that demand for Bitcoin has remained negative since late February. In addition, U.S. spot BTC ETFs have seen $1.5 billion in outflows in the first half of March, with a total of $5 billion bleeding out over the past six weeks.

Fed’s Rate Decision and Market Outlook

On the macroeconomic front, U.S. CPI inflation data for February came in cooler than expected. However, the market does not expect any rate cuts from the Federal Reserve in the upcoming FOMC meeting on March 19. With a 97% chance of rates remaining unchanged, Bitcoin may continue to face turbulent waters in the short term.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.