Macroeconomic pressures were the driving factor behind the synchronized extreme fear in the crypto and stock markets, AMBCrypto noted in a recent report.
Over the past three weeks, Bitcoin [BTC] managed to recover from the low of $64,000, against the backdrop of geopolitical tensions.
A market crash below $45,000 was more likely than a recovery above $100,000, a recent report from Polymarket pointed out. The expectation of such a sharp crash was exaggerated, because it leaves out the “silent buying walls that Wall St. has put up at the $55,000 threshold.”
While the long-term trend remained bearish and a recovery to $100,000 was unlikely, the $65,000 area remained a strong short-term demand zone. Unfortunately for the Bitcoin bulls, demand has been weak lately.
Assessment of Bitcoin’s demand depletion factor
In mid-March, the 24-hour moving average of the net realized profit/loss measure reached figures approaching $17 million per hour. This showed that the price spike above $75,000 was used to aggressively take profits.
In the broader scheme, the $17 million/hour was a modest value, but it managed to suppress the Bitcoin rally. Over the weekend, the net realized profit/loss measure once again spiked positively.
On Sunday, March 22, net realized profits were $23.4 million/hour as bulls and bears battled for control of $70,000. The bears won the battlewhich reflects sales with profit taking.
Within a day, Asian stock markets plummeted due to a worsening energy crisis.
The increased realized profits reflected profit-taking and seller dominance. The holders’ accumulation ratio continued the downward trend of the past month.
It was another sign that active BTC holders were using the price rise to sell their holdings.
President Trump’s 48-hour ultimatum caused a $300 million liquidation wave on the crypto markets in the past 24 hours. Spooked US investor sentiment was clearly visible in the declining Coinbase Premium Index.
The benchmark was hopeful a week ago, when Bitcoin challenged the $75,000 level. Since then the temperature has dropped below zero.
In the coming days, a lack of demand and strong incentives to take profits could hurt potential Bitcoin price gains. From a technical perspective, the $65k area was a strong support zone that could still see a bullish reaction.
Final summary
- Bitcoin faced a wave of liquidations as prices fell below the psychological $70,000 level over the weekend.
- Depletion of demand and increased profit-taking tendency have limited the Bitcoin rally’s potential.