Bitcoin's volatility zones and their market impact. Analysis of potential market threats and the end of the bull phase.
Realized Profits as Market Risk Indicators
The Bitcoin market typically peaks when realized earnings peak. Profits exceeding $3 billion may indicate a local top for $BTC. These profit-taking activities generate additional market sell orders that may impede Bitcoin price growth.
Selling Pressure from Miners and Long-Term Holders
Bitcoin miners contribute to increased market selling volume. In mid-January 2025, $BTC miners sold over 20,000 $BTC, estimated at $2 billion. This large increase in supply may cause a market sentiment shift if demand levels do not match new market conditions. Long-term holders also play a role in the current market sell-off. Their Bitcoin holdings declined by 75,000 BTC last week, indicating potential changes in their long-term investment strategies.
Declining Capital and Network Activity
The declining trend in capital inflows signals a bearish market signal. Bitcoin capital inflows decreased by 63.3% from December 10, 2024, dropping from $134.65 billion to $43.37 billion. Data also shows network activity reaching its lowest point since November 2024, indicating decreased investor interest and engagement, further driving down prices.
Despite multiple warning signs, Bitcoin may continue to grow. Yet, monitoring critical support and resistance levels is crucial. A drop below $91,700 could lead to further price declines to $74,000.
