Bitcoin is facing new pressures, and it shows in the market data. Both long-term and short-term holders are making moves that suggest growing weakness in Bitcoin’s price.
For long-term holders, there’s been a sharp reduction in their realized cap, dropping by $6 billion.
In contrast, short-term holders have been increasing their risk, taking more aggressive positions as they push their realized cap upward by $6 billion.
Short-term holders are those who hold Bitcoin for less than a year, often trading on price fluctuations for quick profits.
These are your typical day traders, swing traders, and scalpers. They thrive on Bitcoin’s volatility and use it to their advantage, moving in and out of the market quickly.
But long-term holders are in it for the long game, usually keeping their Bitcoin for over a year. These holders believe in Bitcoin’s long-term future and typically follow a buy-and-hold strategy.
Bitcoin’s realized price faces tough resistance
Another huge signal comes from the 1d ~ 1w UTXO Age Band. This metric shows the realized price of Bitcoin that’s been held between one day and one week.
The realized price is calculated based on when Bitcoin was last moved, not its current value.
Traders are paying attention to this level, with multiple interactions between the market price and the realized price happening in a short time.
Each time the market price tries to stay above this level, it gets rejected. This means that momentum is weakening.
Open Interest has been giving off signals that corrections are imminent. Over the last four months, corrections and liquidations have been triggered when Open Interest moves above the +1 standard deviation level.
On September 24, Open Interest dropped by 8%. Leverage is also playing a big role. Since May, leverage on Bitcoin’s tops has averaged 15.7%, showing that traders are taking on more risk.
High leverage often leads to quicker liquidations, as traders with over-leveraged positions get wiped out in corrections.
We’re seeing leverage levels move into what are called “impulse zones,” where traders try to maximize their profits while minimizing losses.
But with Open Interest fluctuating between -10% and -8%, it’s clear that traders are treading carefully.
Key indicators show market in a holding pattern
On-chain metrics also paint a bleak picture. The MVRV (Market Value to Realized Value) ratio, a key indicator that measures whether Bitcoin is overvalued or undervalued, currently sits at 1.90.
Historically, when the MVRV dips below its 365-day simple moving average (SMA365), it means there’s uncertainty in the market.
Right now, the MVRV’s 365-day moving average is at 2.03, meaning that Bitcoin is sitting just below this critical level.
The CQ Bull & Bear metric, which measures market trends, is also sitting just below its SMA365 at 0.46, compared to a bullish average of -0.04 on the 30-day moving average.
Since August, this metric has been stuck in a holding pattern, not showing any movement. For now, macroeconomic factors like Federal Reserve policies and global events are keeping the market on edge.
There’s speculation that once the rate-cut cycle kicks in and the Fed starts another round of quantitative easing, Bitcoin would see a bullish rally. Especially if Trump wins the election.
But for now, traders and holders are in a wait-and-see mode.
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