Bitcoin's Dip: Is the Selling Pressure Finally Exhausted?
Bitcoin Shows Signs of Potential Recovery
After facing downward pressure and hitting a low of $107,270, Bitcoin (BTC) is showing early signs of a potential recovery. Currently trading at $109,540, up 0.56% in the last 24 hours, the question remains: Have the weak hands finished selling?
Short-Term Holders Capitulate
Recent market analysis indicates that short-term holders (STH) have been capitulating amid the price decline. According to analyst Burak Kesmeci, Bitcoin’s Short-Term Holder MVRV fell below 1 for the first time in 132 days. This indicates that STHs are, on average, realizing losses.
Key Finding: STH Realized Loss surged from 623 BTC to 2.6k BTC in just two weeks, reflecting fear-driven exits.
Historically, such capitulation events often precede stronger market rebounds as weaker hands exit, setting the stage for accumulation by stronger, more conviction-driven investors.
Long-Term Holders Remain Steadfast
While short-term holders have been selling, Bitcoin's Long-Term Holders (LTHs) are demonstrating strong conviction. Data from Checkonchain shows that LTH's Sell-side Risk has fallen sharply, indicating a preference to hold rather than sell.
Key Metric: LTH Sell-side Risk is approximately 0.0017, suggesting strong market confidence among long-term holders.
This suggests that despite declining profit margins, LTHs are not incentivized to exit their positions, reinforcing a positive outlook for Bitcoin’s long-term prospects.
Signs of Seller Exhaustion
AMBCrypto’s analysis indicates that the intense selling pressure may be easing. The Seller Exhaustion Constant, which dipped through August, has started to rise again.
Important Observation: The rise in the Seller Exhaustion Constant suggests that the rate of selling is slowing down, potentially paving the way for a market recovery.
If demand returns, BTC could stabilize and potentially aim for $112k. However, continued selling pressure from STHs could lead to a slide towards $105,003.
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