Recent studies show that Bitcoin faces declining leverage positions amid global economic uncertainty and geopolitical tensions, leading to increased selling by traders.
Decrease in Bitcoin Leverage Positions
According to CryptoQuant analyst, the Estimated Leverage Ratio (ELR) of Bitcoin has dropped to -0.25, marking the lowest levels since 2021. This sharp decline indicates a significant reduction in leveraged positions and open interest. Analysts suggest that many traders are reducing their exposure amid rising global uncertainty.
Bitcoin Price Dynamics Amidst Uncertainty
At the time of writing, Bitcoin was trading at $101,396, reflecting a 1.34% drop over the past 24 hours and a 5.14% drop over the past week. The trading volume in the last day reached $49.71 billion. Over the weekend, Bitcoin briefly dropped to $98,000 before recovering above $100,000. The price drop occurred against the backdrop of heightened tensions in the Middle East, which increases risks to market stability.
Short-Term Selling and Long-Term Holding
On-chain data reveals that in the last 24 hours, 14,700 BTC were sold at a loss, and 3,100 BTC at a profit, predominantly by short-term holders. This resulted in a net capitulation of 11,600 BTC across centralized exchanges. Despite this volatility, long-term holders continue to hold their positions, as indicated by a moderate reading of the 30-day average 'Coin Days Destroyed'.
Overall, Bitcoin appears to be in a consolidation phase. While short-term volatility has increased, there are no strong signals indicating a shift in long-term trends.
