Toxic Divergence: When “Smart Money” Abandons Ship The current market situation presents a textbook case of bearish divergence. According to recent on-chain data, whales (wallets holding between 10 and 10,000 BTC) have taken advantage of...
The current market situation presents a textbook case of bearish divergence. According to recent on-chain data, whales (wallets holding between 10 and 10,000 BTC) have taken advantage of the recent bounce toward $74,000 to distribute massively. They have reportedly sold nearly 66% of their positions accumulated in late February. This “distribution” movement is typical of corrective phases where institutional investors secure their gains or limit their losses in the face of macroeconomic uncertainty.
Conversely, data shows that retail investors (holders of less than 0.01 BTC) continue to accumulate aggressively, hoping for a quick rebound. Historically, when “Smart Money” sells to “Dumb Money,” the market tends to punish late buyers with a continuation of the decline. Market sentiment, stuck at a level of extreme fear (12/100), confirms that capitulation may not be over yet, despite the drop from the October 2025 ATH ($126,000).
Graphically, Bitcoin shows obvious signs of weakness. After failing to break the $74,000 resistance, the price has slipped below the $67,500 POC. Currently trading around $67,250, BTC finds itself in a “no man’s land” zone. Analysts, including Ali Martinez, have recently highlighted the appearance of a potential “Death Cross” on the 3-day chart, a technical configuration that often precedes violent bearish movements.
If BTC maintains $67,500, a bounce to $70,000 is possible in the short term. But the 16H seller order block confirms this massive whale selling. The probabilities of Bitcoin returning below $60,000 are now much more likely.
According to trader Killa, a return below 60k could occur within the next 5 weeks.
Two bounce zones appear to the south:
While on-chain indicators are flashing red, the crucial question remains: have whales finished selling? If their selling pressure exhausts itself, the current level could offer a contrarian buying opportunity for bold investors.
However, concerning signals are also present in the long term. For the first time in its history, Bitcoin displays a bearish divergence of its monthly CVD. This indicates a capital flight at a level never observed before. The question is therefore whether this signal is a generational opportunity or if Bitcoin is entering a bear market more difficult than previous ones?
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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