Bitcoin [BTC] is now facing the strongest selling pressure in the past three years, according to a prominent on-chain analyst. Joao Wedson, founder and CEO of analytics platform Alphractal, even showed the falling buy/sell pressure delta in a post on X.
The declining readings on the benchmark underscored the aggressive selling activity, as the market’s sell orders easily exceeded the market’s buy orders. As we know, it is the market orders, not the limit orders, that influence prices.
Wedson was optimistic about the find. Although that has been the case strong selling pressureThis level of sales is unlikely to continue for long. It does not have to mark the exact bottom, but generally tends towards a market bottom and may be followed by a consolidation phase.
Assessment of the Bitcoin market regime
While the evidence shows that selling pressure is increasing, holder retention rates have increased in recent months. The metric tracks the percentage of addresses that maintain a Bitcoin balance for 30 consecutive days.
By dividing the number of addresses with a balance by the total number of addresses that held a balance at any point in the observation period, the metric attempts to determine whether holders are quickly holding or selling.
The rising retention rate is a sign that investor confidence and long-term commitment may be increasing, even as there are legitimate fears that the bull market is over.
While the retention metric findings were positive, traders and investors should keep an eye on the current market regime. Crypto analyst Axel Adler Jr pointed out that according to the values of the buy/sell index (1 day, 7 days and 30 days), the market remains risky for buyers.
The 7D and 30D values showed signs of overheating, although the 1D value was only 43 after the price drop to $84.4k last week.
Overall, the structure remains dangerous for buyers, and long positions tend to disappear during price rises. This makes it difficult to sustain rallies. It can be seen as a warning that traders should sell the bounce and book profits.
Final thoughts
- Current sales strength is at a three-year high, but this magnitude may not last for long. It could give way to a consolidation phase lasting several months.
- Any rise in BTC prices should not be seen as the start of a recovery, but as an opportunity to sell.