Since the US-Israeli war with Iran began in late February, Bitcoin has traded between $65,000 and $73,000. The resilience has extended to Ethereum and the broader altcoin market as the war continues.
Comment on this on their weekly market updateCoinbase analysts, led by David Duong, noted that the panic sell-off in Bitcoin [BTC] and ether [ETH] that prevailed in February has fallen significantly.
Citing the Spent Output Profit Ratio (SOPR), a metric that tracks whether short-term holders (STH) are selling at a loss or a profit, Coinbase added:
A rebound in the STH SOPR for BTC and ETH that began in late February indicates that spot demand has recently been strong enough to offset offsetting selling pressure, indicating more resilient market positioning.
Duong added that panic sell-offs or capitulations always set the stage for a spot positioning reset and a possible sustainable recovery.
Bitcoin Panic Selloff Drops 87%
A similar sentiment was shared by Bitfinex analysts, who highlighted this daily BTC sell-offs at a loss dropped significantly from $3 billion to $370 million – an 87% drop in selling pressure.
The analysts added,
The cohort willing to sell at a discount has largely exhausted themselves. ETF flows this week will show whether new demand emerges or whether the bandwidth will only tighten further.
So far this week, Spot BTC ETFs have done just that included daily net inflows of $167 million and $250 million on Monday and Tuesday, respectively.
If the inflows continue through the week, bulls may try to break out above $73K. Otherwise, the lateral structure could expand, as Bitfinex analysts expected.
What’s next for BTC?
Well, the outlook was reinforced by the price charts. Losing the mid-range of the Bollinger Bands would likely send BTC to $65K or $66K. The price could fall further if the upcoming talks between the US and China do not yield a positive outcome for energy markets and the West Asian crisis.
A MACD deathcross and losing the neutral level of the RSI could be the tell-tale signs of potential additional losses that could drag BTC down. According to Coinbase, a sustainable recovery could only be feasible if BTC clears the USD 73,000 resistance.
Final summary
- Bitcoin’s daily sell-off has fallen significantly, by 87%, from $3 billion to $370 million.
- Bitfinex analysts believe that a drop in pressure could set the stage for a sustainable recovery, but only if ETF flows remain green.