- Despite Bitcoin’s decline, long-term and short-term holders remained optimistic.
- A broader market perspective suggested the potential for a price jump as the available BTC supply has decreased significantly.
After reaching an all-time high of $109,114.8 on January 20, just hours before Donald Trump’s inauguration, Bitcoin has [BTC] is down 2.42% to $101,308.55, according to CoinMarketCap.
AMBCrypto’s analysis suggests that BTC’s decline is likely a retracement as the asset prepares for another rally given prevailing market sentiment.
BTC’s price momentum continued
According to Glassnode, Bitcoin’s Long-Term Holder Net Unrealized Profit/Loss (LTH-NUPL) has crossed the 0.75 threshold – a level historically associated with the “Euphoria/Greed” phase of the market cycle.
The LTH-NUPL measures unrealized gains or losses for addresses that have held BTC for at least 155 days.
A rise in unrealized gains usually indicates that traders are more likely to sell their assets to secure profits, indicating that the market may have reached a local top.
Source: Glassnode
Nevertheless, market sentiment remained positive, with short-term bonds driving further price increases due to continued buying activity.
At the time of writing, the ratio of market value to realized value of short-term holders (STH-MVRV) was 1.16, exceeding the one-year trend line of 1.1. STHs are defined as addresses that have held BTC for less than 155 days.
This recovery suggests that short-term holders are realizing a 16% gain above their cost basis – the price at which they acquired BTC.
In other words, this cohort’s assets are above their purchase price and above the breakeven point.
Source: Glassnode
Overall, this bullish sentiment among both long- and short-term holders demonstrated the potential for further growth in the price of BTC as buying activity increased across the market.
Reached a new high
The derivatives market showed bullish sentiment for BTC, with the Funding Rate hitting a new monthly high of 0.0350% – the highest level since December 5, 2024.
Source: Glassnode
A high funding rate indicated that long traders paid short traders periodically to hold their positions, with the expectation of a price increase.
A high funding rate indicates that BTC’s price is likely to trend higher as market participants join this outlook.
Hyblock Capital’s liquidation heatmap shows that BTC was at a critical juncture, targeting two key liquidity levels: $106,000 on the upside and $99,200 on the downside.
These levels often act as price magnets, pulling BTC toward them.
Source: Hyblock Capital
Given current market sentiment, BTC could first drop to the $99,200 level before recovering to $106,000, potentially setting new highs.
The market outlook for BTC remains positive
The overall outlook for the BTC market remains optimistic. Research from CryptoQuant has shown that exchanges have seen a massive outflow of 1 million BTC over the past three years.
Source: TradingView
Read Bitcoin’s [BTC] Price forecast 2025–2026
Such outflows indicated a reduced supply of BTC available for trading, leading to a demand squeeze and reduced selling pressure.
If these outflows continue – indicating more BTC being removed from exchanges – it could drive BTC to higher price levels, as seen during similar events in the past.