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Bitcoin – Widespread capitulation signals likely bottom, BUT risks remain

2min Read

Here’s what experts thinks about BTC’s next move after rebounding from $76k.

Bitcoin - Widespread capitulation signals likely bottom, BUT risks remain
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  • Bitcoin’s massive +$800M per day realized losses could mark a likely bottom
  • Overall demand has remained negative, with BTC ETFs bleeding over $5 billion 

Bitcoin [BTC] has stayed below $85k on the charts after a brief dip to $76k – A move Bitfinex exchange analysts believe could likely signal stabilization. 

In their weekly market report, the analysts noted that traders saw a realized loss of $818 million per day, a market flush that always precedes a potential bottom. 

“Such widespread capitulation often precedes market stabilisation, though geopolitical and macroeconomic concerns remain a significant overhang.”

Will BTC rebound?

However, short-term holders (STH) have been selling BTC at a loss for the first time since October 2024. This is a trend that, if extended, could complicate reversal efforts, the analysts added. 

Bitcoin

Source: Bitfinex

They cited the Bitcoin Spent Output Profit Ratio (SOPR), which tracks traders’ profitability, as it dipped below 1. It indicated that holders have been selling at a loss. 

“Short-term holder SOPR recorded its second-largest negative print of this cycle at 0.95, signalling that new market entrants are capitulating.”

For the recovery shift, Bitfinex analysts claimed that SOPR must surge above 1 again, which would suggest ‘re-accumulation’ and ‘bullish continuation.’

The weak BTC demand corroborated Bitfinex’s warning. In fact, according to CryptoQuant’s data, demand for the cryptocurrency has remained negative since late February.

Bitcoin

Source: CryptoQuant

U.S. spot BTC ETFs have bled $1.5 billion in the first half of March. In February alone, the product saw $3.56 billion outflows per Soso Value. They’ve seen over $5 billion bleed-out in the last 6 weeks. 

Bitfinex analysts further warned that the mixed reading on U.S macroeconomic factors could still dent crypto markets. Despite Trump’s tariff wars, the U.S CPI inflation data came in cooler than expected for February. 

Unfortunately, the market is not expecting any Fed rate cut in the next FOMC meeting scheduled for 19 March. Interest traders have been pricing a 97% chance that the Fed would keep the rates unchanged at the current target of 4.25%-4.50%. 

There is only a 3% chance of a 25bps rate cut during next week’s FOMC meeting. As such, BTC could still be stuck in choppy waters in the short term.  

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Benjamin Njiri is a Crypto Analyst and Journalist at AMBCrypto who specializes in technical analysis and identifying emergent market trends. He excels at breaking down complex chart patterns and on-chain data to make them accessible and actionable for investors. His rigorous analytical approach is founded on his academic background as a Telecommunication Engineering graduate. This discipline has equipped him with an expert understanding of signal processing and data analysis, allowing him to systematically filter market noise from true trend signals with engineering precision. Armed with this unique perspective, Benjamin focuses on providing clear, data-driven insights into the digital asset landscape. His work is dedicated to demystifying the intricate world of cryptocurrencies, empowering readers to understand the forces that shape the market and to navigate it with greater confidence.
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