Bitcoin has continued its decline for a sixth straight month after peaking at an all-time high of $126,000. Although the correction is already substantial, data from the chain and the market indicate that it may not be over yet.
The price is approaching a critical support zone where a large portion of long-term holders previously gathered. A breakdown at this level could open the door to a move towards $50,000.
Institutional selling increases downside risk
The recent 1% reduction in business Bitcoin [BTC] government bonds are facing increasing pressures, including debt obligations and continued market weakness. Although modest in scale, the shift is notable given the generally long-term orientation of institutional investors.
Recent disclosures tracked by AMBCrypto showed that at least four corporate entities reduced their Bitcoin exposure between March and early April.
Mara Holdings led the sell-off, liquidating 15,133 BTC worth over $1 billion in March. Riot Platforms and Empery Digital followed suit, selling a combined 2,295 BTC worth approximately $156 million on April 2.
Despite these sales, corporate entities still control approximately 1.16 million BTC, worth approximately $77 billion. However, this significant position is becoming increasingly vulnerable as Bitcoin trades near the total cost basis of a key cohort of long-term holders – a cohort that overlaps with institutional accumulation levels.
The basis for the long-term holding costs comes into focus
On-chain data from the UTXO Realized Price Age Distribution highlights a crucial development. The statistic tracks the average purchase price of Bitcoin over different investment periods and provides insight into investor positioning.
Current data shows that Bitcoin is approaching the $63,049 cost basis for holders who accumulated between 18 months and two years ago. This level now acts as a potential turning point.
With Bitcoin trading at $66,794, the margin above this cohort’s cost basis has narrowed significantly. A sustained decline in prices could force these holders into losses, increasing the likelihood of defensive selling.
Short-term holders pose an additional layer of risk. Investors who entered the market in the past month remain particularly sensitive to volatility and are more likely to exit positions under pressure, reinforcing downward momentum.
The Net Unrealized Profit/Loss (NUPL) metric reinforces this trend. With a value of 0.6, this indicates a sharp compression of unrealized profits across the network.
As profitability declines, the likelihood of capitulation increases, especially if prices continue to weaken.
Weak capital inflows limit recovery potential
Market structure data point to another constraint: limited capital inflows.
Spot market activity has shown moderate demand in recent months. Bitcoin recorded around $8.04 billion in Spot purchases over the past 120 days, while only $6.17 billion flowed in over the past 90 days.
This level of demand remains insufficient to offset continued selling pressure or support a strong recovery.
At the same time, macro uncertainty continues to weigh on risk sentiment. Ongoing geopolitical tensions and global economic instability have led investors to adopt a more cautious stance, reducing capital allocation to risky assets such as Bitcoin.
Unless inflows increase meaningfully, the market may struggle to stabilize, exposing Bitcoin to further downside in the short term.
Final summary
- Public and private entities have cut about 1% of their Bitcoin holdings as selling pressure increases.
- Bitcoin is now trading close to the cost basis of investors gathered between 18 months and two years ago, increasing downside risk.