Bitcoin Market Analysis

Bitfinex analysts reported that Bitcoin buyers who made purchases in the last month faced significant losses during recent market sell-offs.

Bitcoin (BTC) lost 13.5% of its value in the last 30 days, dropping over 29% from its all-time high set in January, marking the largest correction of the current bull cycle, according to the Bitfinex Alpha Report released on March 17.

Similar past cycles experienced drawdowns between 30% and 50%, but some had anticipated a different outcome this time due to increased institutional adoption of spot BTC exchange-traded funds (ETFs) on Wall Street.

In the past year, U.S. spot BTC ETFs surged to over $100 billion in assets under management, with issuers like BlackRock and Fidelity attracting significant capital inflows.

Short-term Bitcoin Holders Capitulating

Investment in these ETFs has declined over recent weeks, with consecutive outflows reaching record highs. Nearly $1 billion exited these products last week, indicating that “institutional buyers have not yet returned with sufficient strength to counteract selling pressure,” according to Bitfinex analysts.

Lackluster price movements have also unsettled crypto sentiment. The Fear & Greed index has dropped to multi-year lows, “exacerbating sell-side pressure” as short-term holders capitulated, as noted in the Bitfinex report.

Data from IntoTheBlock supports Bitfinex’s claims, revealing that 20% of all BTC holders are facing unrealized losses. Most of these holders purchased their Bitcoin between $85,700 and $106,800.

> Historically, when fresh capital inflows slow and cost basis trends change, it indicates a weakening demand environment. This trend is becoming evident as Bitcoin struggles to maintain key levels. Without new buyers, Bitcoin risks further consolidation or downside as weaker hands continue to exit.
>
> – Bitfinex analysts

Possible Turnaround

Additional price declines could occur as financial markets process the implications of Trump’s tariffs and U.S. macro data.

While inflation has eased and the job market shows resilience, rising underemployment and macro uncertainty have led many investors to adopt a cautious approach. However, Bitfinex analysts believe a bullish outcome remains possible if the appropriate conditions arise.

> The primary factor to monitor is whether long-term holders or institutional investors re-emerge at these lower levels. If affluent investors start absorbing supply, it could indicate a shift back toward accumulation, stabilizing price action and reversing sentiment.

Read more: Standard Chartered slashes ETH price target by 60%, predicts $4k by year-end