- The crypto fear and greed index fell 24 points in a day.
- The realized losses metric showed Bitcoin investors were not rushing to exit the market, unlike in late 2022.
The Kobeissi Letter reported that the drying up of liquidity could have caused the crypto losses of the past few days.
On the 24th of February, Bitcoin [BTC] shed 4.89%, and the total crypto market capitalization was down by 6.65% in 24 hours, at press time.
The crypto fear and greed index fell from 49 the day before and stood at 25, at the time of writing, signaling extreme fear.
Bitcoin ETF outflows and the losses for the S&P 500, which fell 1.19% from the day’s high to the day’s lows. This could help explain the swift shift in sentiment.
Citadel Securities is looking to become a liquidity provider for cryptocurrencies, which might have been a “sell the news” event.
BTC expects more losses in the short term as…
Source: X
Crypto analyst Axel Adler used the Realized Profit and Loss metric to highlight that total realized losses remain moderate. Adler noted that the past quarter’s realized losses were significantly smaller than the panic selling in late 2022
While holders were locking in losses, it suggested a healthier market, sustained demand, and relatively positive sentiment. Investors were not rushing to exit at any price, and those who were selling were more selective.
The long-term price trend remained upward. Large drawdowns are common in a bull run, but the online sentiment is highly bearish.
The realized BTC losses indicated that the overall uptrend might not be affected, the analyst concluded.
Source: CryptoQuant
The Realized Cap UTXO Age Bands metric shows the distribution of the realized market cap by age bands. Each colored band represents the ratio of the realized cap of UTXOs last moved within the specified period.
Comparing current trends with previous Bitcoin cycles, we see an increase in the realized cap share of 1-month to 6-month UTXOs. This often marks periods when prices continue to tumble.
However, older age bands have remained flat since January, indicating faith from longer-term holders.
The conclusion is that short-term volatility and increased losses appear likely, especially since the price is trying to break below the $92k support zone. Yet, longer-term holders have no reason to panic, at least not yet.
