Recent data shows that Bitcoin buyers who acquired the asset within the last month were hit hardest by the recent market sell-off.
Bitcoin Price Decline
Bitcoin shed 13.5% of its value in the past 30 days and has dropped over 29% from its all-time high set in January, the biggest correction of the current bull cycle, according to the Bitfinex Alpha Report released on March 17. Past cycles witnessed similar drawdowns ranging from 30% to 50%, but a different outcome was expected this time due to new institutional adoption through spot BTC exchange-traded funds on Wall Street.
Short-term Holder Capitulation
Cash allocated to these ETFs has trickled down over the past few weeks, while consecutive outflows have now set records. Last week, nearly $1 billion exited these products, signaling that institutional buyers have not yet returned with sufficient strength to counteract selling pressure, according to Bitfinex analysts. Tepid price action has also rattled crypto sentiment. Indicators like the Fear & Greed index dropped to multi-year lows.
Possible Turnaround
Further downside price action may ensue as financial markets digest the result of Trump's tariffs and U.S. macro data. While inflation cooled and the jobs market showed signs of resilience, a rise in underemployment and macro uncertainty incentivized a hands-off approach from many investors. However, Bitfinex analysts believe a bullish outcome remains possible if the right factors align.
Bitcoin continues to struggle with selling pressure amid short-term holder capitulation. Whether larger investors begin to re-enter the market remains a pivotal question for Bitcoin's future price movement.
