Bitcoin high-entry buyers are driving sell pressure, price may ‘floor’ at $70K
Bitcoin buyers are currently facing significant losses, particularly those who entered the market at or near its all-time high of $109,000 in January. Recent data from on-chain analytics firm Glassnode reveals that this surge of buying activity has led to a notable sell-off as prices decline. According to their March 11 market report, this has resulted in “intense loss realization and a moderate capitulation event” among top buyers. Glassnode speculates that if the selling continues, Bitcoin’s price could potentially drop to around $70,000.
As Bitcoin’s price fluctuations have continued, the short-term holder realized price—representing the average purchase price for those holding Bitcoin for less than 155 days—has sharply risen. In October, this price stood at $62,000, but it has since increased by approximately 47% to a current level of $91,362, according to Bitbo data. However, the present trading price of Bitcoin hovers around $81,930, leaving short-term holders with an unrealized loss of about 10.6%.
Glassnode’s analysis indicates that market momentum and capital flows have taken a downturn, pointing to a decline in demand strength. The firm notes that investor sentiment is currently driven by uncertainty, contributing to the selling pressure observed in recent weeks. Furthermore, they describe many short-term holders as being “deeply underwater,” particularly in the price range between $71,300 and $91,900.
Market dynamics have also drawn the attention of research firm 10x Research, which recently labeled the situation a “textbook correction.” They highlighted that around 70% of the current selling activity can be attributed to investors who made purchases in the last three months as Bitcoin faced a dip below $80,000.
Expert predictions have varied, with BitMEX co-founder Arthur Hayes suggesting that Bitcoin might retest the $78,000 price level and could further decline to $75,000 if that support fails. A similar sell-off pattern was observed in August when Bitcoin dropped from $68,000 to about $49,000, reacting to economic fears and sluggish growth in the tech sector.
Interestingly, despite the current downturn, Bitcoin has seen a recent uptick of 7.5% over the past 24 hours, as the broader U.S. market steadied following a tumultuous day. This volatility mirrors ongoing concerns about the potential for recession, which have been exacerbated by uncertain economic signals.
In sum, the current state of Bitcoin illustrates the volatile nature of cryptocurrency markets, where investor behavior is heavily influenced by price fluctuations and broader economic factors.
