Is Bitcoin’s Early Capitulation a Sign to Buy? How Selling Pressure Is Still Under Control
Bitcoin has been navigating a tight consolidation phase since late November, stirring anticipation among traders about an imminent major move. In recent bitcoin news, volatility has compressed significantly, with prices stabilizing near key psychological thresholds. This has led to divided opinions in the market. Some analysts believe this consolidation phase is setting the stage for an upward recovery. However, a broader consensus warns of potential further declines before a sustainable trend emerges.
One notable development in the crypto landscape is the emergence of signs pointing towards long-term holder (LTH) capitulation. This phenomenon, according to top analysts, could play a crucial role in Bitcoin’s next major move. Historically, when LTHs begin to capitulate, it signals a pivotal moment in the market cycle. For further insights on crypto trends, explore our crypto section.
Spotlight on Long-Term Holder Behavior
Analyzing the Long-Term Holder SOPR (Spent Output Profit Ratio) provides valuable insights into the conviction levels of Bitcoin’s most resilient investors. The LTH SOPR measures whether coins held for over six months are sold at a profit or loss. Recently, the SOPR dipped below the critical 1.0 level, indicating some long-term holders are selling at a loss. This behavior, particularly among newer LTHs, suggests rising stress among those who bought at cycle highs and now face prolonged drawdowns.
Despite these developments, the 30-day moving average of the LTH SOPR remains at 1.18, indicating that long-term holders have realized an average profit of 18% over the past month. This figure, although healthy, is below the annual average of 2.0, highlighting a slowdown in realized profits. If this trend continues, it could signal increasing sell pressure. Conversely, declining realized profits might suggest that traders are gradually exhausting selling pressure. A bullish continuation requires the LTH SOPR to stabilize and trend upward, signaling renewed confidence among holders.
Bitcoin Price Consolidation at Critical Levels
Bitcoin’s price continues to hover within a well-defined consolidation range following a sharp correction from October highs. The weekly chart shows prices just below the $92,000–$94,000 resistance zone—a critical inflection point for market structure. The broader trend remains constructive as Bitcoin stays above its rising 200-day moving average, sloping upward near the mid-$80,000 region.
Despite the supportive trend, short-term momentum has weakened. The 100-day moving average has flattened, reflecting a loss of upside momentum, while the 50-day average is attempting to stabilize. Recent price action indicates a series of higher lows, suggesting buyers are gradually absorbing selling pressure. However, declining volume during this consolidation phase indicates a lack of strong conviction from either side of the market, which is typical of compression phases preceding larger directional moves.
A sustained break and weekly close above $94,000 would signal renewed strength, paving the way for a move toward the $100,000–$105,000 range. Conversely, failure to hold above the $86,000–$88,000 support zone could increase downside risk and shift focus toward deeper retracements. For those interested in trading platforms, check out this link.
In conclusion, Bitcoin remains in a state of balance, building tension for its next decisive move. As market participants watch closely, the behavior of long-term holders and price movements at critical levels will likely determine the cryptocurrency’s future trajectory.
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