Bitcoin: Signs Indicate Potential Low Point, Despite Persisting Risks

Key Points

• Bitcoin’s market has seen a daily realized loss of $818 million, potentially signaling a market bottom.
• Short-term holders have been selling Bitcoin at a loss, a trend that could hinder reversal efforts.

Bitcoin Market Experiences Significant Losses

Bitcoin [BTC] has remained under $85k, following a brief drop to $76k. Analysts from Bitfinex believe this could indicate stabilization. According to their weekly report, there has been a daily realized loss of $818 million. This type of market flush often precedes a potential bottom.

Short-term holders (STH) have been selling BTC at a loss for the first time since October 2024. This trend could complicate reversal efforts if it continues.

Recovery Depend on SOPR Surge

The Bitcoin Spent Output Profit Ratio (SOPR), which tracks traders’ profitability, has dipped below 1. This suggests that holders have been selling at a loss. For a recovery to occur, Bitfinex analysts claim that the SOPR must rise above 1 again, signalling ‘re-accumulation’ and ‘bullish continuation’.

However, demand for BTC has remained negative since late February, according to CryptoQuant’s data. U.S. spot BTC ETFs have lost $1.5 billion in the first half of March. In February alone, the product saw $3.56 billion outflows. In total, they’ve seen over $5 billion bleed-out in the last 6 weeks.

Analysts have warned that mixed readings on U.S macroeconomic factors could still impact crypto markets. Despite Trump’s tariff wars, the U.S CPI inflation data was cooler than expected for February. The market does not anticipate any Fed rate cut in the next FOMC meeting scheduled for 19 March. There is only a 3% chance of a 25bps rate cut during next week’s FOMC meeting. As such, BTC could remain in choppy waters in the short term.