Short-Term Holders on Verge of Capitulation as Bitcoin Faces Risk of Retesting $60,000

▲ Cryptocurrency market plunge

Bitcoin (BTC) prices have continued to decline day after day, pushing short-term investors in the market into significant loss territory and intensifying selling pressure.

According to cryptocurrency-focused media outlet CryptoPotato on February 12 (local time), as Bitcoin’s price correction deepens, short-term holders who have held their assets for less than 155 days are suffering severe investment losses.

On-chain data analysis shows that the Market Value to Realized Value (MVRV) ratio for short-term holders has fallen below 1, indicating that their average purchase price is higher than the current market price. This suggests that most investors who recently entered the market are experiencing unrealized losses, raising the likelihood of panic selling if prices fall further.

In particular, after Bitcoin fell below the $65,000 level, the short-term holders’ realized price of $68,000 has turned into a strong resistance level, hindering any rebound. The proportion of short-term investors transferring their holdings to exchanges after failing to withstand losses has surged, negatively impacting market liquidity supply.

Meanwhile, long-term investors who have held assets for more than 155 days continue to show relatively firm holding behavior. However, analysts warn that if capitulation selling by short-term holders does not subside, even the broader market support level of $60,000 could come under threat. The market’s psychological threshold now hinges on whether Bitcoin can reclaim $68,000, the level at which short-term holders would return to profitability.

The loss burden faced by short-term participants in the Bitcoin market is expected to remain a hurdle to price recovery for the time being, and market participants are likely to maintain a cautious stance in the near term.

Disclaimer: This article is provided for investment reference purposes only, and no responsibility is assumed for any investment losses resulting from its use. The content should be interpreted solely for informational purposes.