Bitcoin (BTC) speculators sell at a loss, pushing the market into oversold zone

The newest generation of Bitcoin (BTC) buyers continues to capitulate, with most of them selling at a loss. The holding sentiment broke down as BTC dipped under $85,000, causing even earlier buyers to cut losses. 

The newest wallets that bought Bitcoin (BTC) in the past 1-3 months are capitulating. The buyers are now shedding coins at a loss, as BTC remains range-bound under $85,000. Despite expectations for long-term holding, panic set in among the most recent buyers. 

The latest capitulation pressured the BTC price down to $80,000, with only relatively small recoveries. BTC regained a position of $83,289.30, remaining bound in a range for the past few days. Despite encouraging fundamentals, BTC remains weak and pressured by the sliding stock markets and generally fearful sentiment. 

The 1-3 month cohort of holders has been shedding coins more rapidly based on previous hold waves mapping. This time, the realized capitalization of the newest wallets fell by $100B since February, reflecting the market downturn. 

The newest buyers hold both unrealized and realized losses. The ratio of holding to selling shows a trend toward divesting and capitulating, rather than riding out the turbulence. At the same time, wallets aged over 3 months keep holding and expanding their BTC reserves. 

The BTC capitulation may not be over

The recent selling from recent buyers sets the pace for the end of the capitulation and an eventual recovery. The ratio of market value to realized value (MVRV) is almost in the range of the 2024 correction, standing at 1.8. 

The capitulation may be over soon, though the ratio could also dip to levels not seen since August 2024. 

The MVRV ratio also shows the unraveling of the post-election narrative. November and December helped Bitcoin holders realize the highest possible value, and the ratio has gone downward since then. 

Based on the MVRV ratio, the current downward trend may end the capitulation at around $70,000 per BTC. This expectation also explains the readiness of new traders to sell, while not expecting another rally any time soon. 

The fearful attitude of the market is slowly repairing, but strong holding behaviors are rare for retail traders. The major fear is that Bitcoin may repeat the 2021 cycle, followed by years of holding near a lower range. 

The optimistic view is that short-term capitulations are the result of market manipulation and the ongoing liquidation of long positions. BTC activity is closely watched for fundamental factors, whale activity and renewed buying demand. Currently, overall BTC demand remains weak, signaling a potential local low. 

Bitcoin replaces altcoin speculation, still showing weakness

The current part of the cycle is considered a complete Bitcoin market, as none of the top 100 assets outperforms BTC. 

The altcoin season index is back at 20 points, levels not seen since the summer of 2024. The index points to a full-on BTC season, where the main coin kept its dominance close to 60%. 

The Bitcoin season, however, does not coincide with a BTC rally or any factors boosting price action. BTC has shifted from neutral toward the oversold range in the past weeks, suggesting a shift in the trend may arrive soon. 

BTC open interest has also not recovered to its all-time high, only adding another $1B in positions to $24.13B. The coin has not chosen a specific direction, causing both short and long liquidations in different time frames. In the past 24 hours, BTC liquidations reached $73.67M, slowing down since the peak on February 25.

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