Despite a temporary dip in price of Bitcoin, its realized market capitalization reached a new all-time high of $857 Billion. This signals the continuation of the bull cycle.
This increase in realized capitalization highlighted ongoing market strength.
Recently, the figure has ascended, diverging from the short-term correction seen when price of Bitcoin shows volatility.
The rise in realized market capitalization showed new entrants were purchasing Bitcoin released by long-term holders who profited from earlier acquisitions at lower prices.
As of press time, the trend showed the price Bitcoin rebounding off the lows, indicating the absorption of selling pressure by new market participants.
Historically, the movement of Bitcoin among long-term investors, those holding for over six months, indicated their current selling ratio stands at 39.74%, compared to 15.66% at the last cycle peak.
This substantial difference suggested that the market peak is yet to be reached, offering room for further growth.
However, the overarching trajectory for BTC appeared to uphold a long-term uptrend, supported by a robust increase in realized capitalization.
Bitcoin Sees Excessive Leverage
With the cycles uptrend set to continue, Bitcoin liquidation heatmap revealed a critical juncture.
It is marked by high market leverage, potentially setting the stage for volatile price swings.
This significant accumulation of both long and short liquidations across major exchanges like Binance, Bitfinex, and BitMEX, with sharp spikes in liquidations corresponded closely to price moves.
A substantial number of long positions have been established as Bitcoin’s price approached and briefly surpassed the $97,000 mark.
This setup poses a risk of a downward price flush to liquidate these longs. It could drive prices lower rapidly if key support levels near $95,000 and $93,500 fail to hold.
Conversely, the accumulation of short positions during these price peaks suggests the potential for an upward price squeeze.
Should BTC’s momentum continue upwards, triggering a squeeze, it could rapidly punish shorts.
That would potentially propelling the price towards $100,000, as seen by the anticipated target at $95,853.
How Price of Bitcoin Could Close in February
Analyzing BTC’s historical February performance along the current year’s trends indicated a potential continuation of a red close for February 2025, which would be the third such instance in its history.
As of now, February 2025 shows a -6.25% return, echoing past trends where February 2014 and 2015 also closed negatively with -31.03% and -8.6% respectively.
However, historical data noted that Bitcoin’s behavior in February was variable. Some years like 2021 saw significant gains of more than 36.78%.
This variability suggests that while the current month is halfway and currently negative, shifts can occur quickly.
February could close in red or in green given the loss is minimal thus can be easily recovered.
If February closes red, March could either exacerbate February’s losses or potentially offset them with substantial gains.
Given this pattern, stakeholders should prepare for possible sharp movements for the price of Bitcoin, as the month transitions.
It would be influenced by broader market sentiments and emerging macroeconomic factors.
