Panic-induced Bitcoin Sell-off by Short-Term Holders: future Impact on BTC Explained

Key Points

• Bitcoin’s short-term holders may have panic-sold following Bybit hack news, causing significant market volatility.
• Analysis of the 90-Day Active Supply shows a decline in trading activity, indicating reduced selling pressure.

Bitcoin’s short-term holders (STHs), likely driven by panic following the Bybit hack news, may have realized substantial losses. This has resulted in notable market volatility for Bitcoin.

Indicators of Bearish Momentum

Over the past 16 hours, Bitcoin’s 4-hour chart on Binance showed significant bearish indicators. The Exponential Moving Average (EMA) cross revealed a bearish crossover, signaling short-term downward momentum. This aligns with Bitcoin’s price decline to $96,259.9, a -0.12% drop from the previous period.

The Relative Strength Index (RSI) stood at 46.05, reflecting a neutral but slightly bearish outlook. However, if it rebounds above 50, bullish sentiment might return, supporting price recovery.

STHs Offloading Bitcoin

The Cumulative Volume Delta (CVD) showed a net volume delta of -94.67K, reflecting strong selling pressure in the last 8 hours. This suggests that STHs may be offloading Bitcoin, potentially forming a short-term local bottom as selling pressure diminishes.

The Short-Term Holder Profit & Loss (P&L) to Exchanges Sum chart for the last 24 hours also highlighted substantial losses among STHs. This data suggests a potential local bottom, as distressed selling often exhausts downward momentum, creating a possible buying window for traders.

Decline in Trading Activity

Analysis of the 90-Day Active Supply chart for Bitcoin showed a notable decline in recent months. This metric indicates a decline in trading activity, with current trends suggesting that STHs had largely exited, potentially reducing selling pressure.

The Bitcoin netflow chart for aggregated exchanges over the last three months revealed a sharp net outflow of -546.11 Bitcoin in the past 24 hours. This sudden negative netflow typically indicates that holders are withdrawing Bitcoin to off-exchange wallets, suggesting reduced selling pressure.

The 24-hour netflow change of +269.71 Bitcoin suggests renewed buying interest. Despite short-term volatility, long-term indicators suggest a potential shift toward recovery as selling pressure subsides.