After weeks of downward pressure, Bitcoin is showing early signs of a potential rebound. Short-term investors are capitulating, while long-term ones remain confident. What are the key indicators to watch for?
Since its recent peak of $124,000, Bitcoin has faced persistent downward pressure, falling to as low as $107,270. Currently, the cryptocurrency is valued at $109,540, up 0.56% over the past 24 hours. During this period of decline, short-term investors have begun to capitulate, leading to negative consequences.
According to analyst Burak Kesmeci, the MVRV ratio of short-term Bitcoin holders has fallen below 1 after 132 days of profits. A drop below 1 indicates that these investors are now at a loss. Furthermore, realized losses have significantly increased, jumping from 623 BTC to 2,600 BTC in just two weeks.
Historically, substantial losses among short-term investors typically occur near market bottoms, allowing “strong hands” to accumulate, which could signal a potential rebound.
While short-term investors are actively selling, long-term Bitcoin holders remain stable. The short-term sell-side risk level is dropping sharply, indicating strong confidence from long-term investors who prefer to maintain their positions rather than sell.
Despite intense selling pressure, it appears that short-term investors have sold enough and are now exhausted. In fact, the seller exhaustion constant has begun to increase again after an August decline. This pattern often emerges when selling slows down, reducing pressure and paving the way for recovery.
If demand returns, Bitcoin could stabilize and target $112,000. However, if short-term investor selling persists, a drop to $105,003 remains possible.
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