BTC Losses Resurface as Shorts Exit: On-Chain Analysis Suggests $94k Support

Key Takeaways

• Approximately 15,000 BTC, held by short-term traders, were liquidated at a loss during the past week.
• On-chain data points to a potential Bitcoin price consolidation base near the $94,000–$97,000 zone.

An Overview

Bitcoin experienced a period of relative quiet over the past week amid market uncertainty stemming from the Israel-Iran conflict and anticipation surrounding the Federal Open Market Committee (FOMC) meeting. Yet, beneath the surface calm, significant activity unfolded, with short-term holders registering notable sell losses.

Short-Term Holder Exit Signals Concern

According to CryptoQuant data, roughly 15,000 BTC accumulated by short-term holders (STHs) – colloquially termed “weak hands” – were moved at a loss during the week under review.

Further granularity reveals heightened selling pressure: CryptoQuant reported that 959 BTC sold below acquisition cost occurred on Monday, peaking at nearly 16,700 BTC by Wednesday. This activity correlated temporally with a Bitcoin price dip from $106,500 to $103,500.

This pattern highlights a recurring behavioral trend where STHs exhibit panic selling during market corrections, locking in losses. Crucially, this exiting action often feeds into accumulation by long-term holders (LTHs),”strong hands,” potentially stabilizing price action.

An overall trend of declining STH supply positions is observable, particularly following substantial market drawdowns. This reduction in selling pressure could foster accumulation opportunities and signal a possible early stage consolidation or price floor formation.

STH-LTH Net Flows Bolster Support

Analysis from CryptoQuant indicates pronounced net selling by STHs over the past month. Significantly, most of this outflow appears to be absorbed by LTHs, a dynamic suggesting ongoing conviction in Bitcoin’s long-term trajectory and contributing factors supporting the price staying above the $100,000 threshold.

“Blind Spot” and Cost Basis Define Potential Support

Data analysis from Swissblock adds context to Bitcoin’s current position. It indicates a persistent negative spot volume delta since June, reflecting underlying selling pressure despite recent gains driven by minimal buying volume. This scenario points towards an ongoing dip phase before a potential significant breakout, contingent on renewed demand.

Considering Bitcoin’s tendency for short-term dips preceding rallies, the on-chain cost basis for STHs delineates a support range approximately between $94,000 and $97,000. The analysis suggests the possibility of this range establishing itself as a local bottom.

A price consolidation below $100,000 appears likely, with offers to revisit key liquidation zones and potentially test a fair value gap and daily order block between the $94k-$97k levels.

Related: Analysts Vary Opinions on Upcoming Bitcoin Volatility and Price Targets