Key Insights:
- Bitcoin (BTC) crypto price could be on the verge of capitulation according to its UTXO data.
- Binance highlights bearish divergence between the BTC price and its taker-buy volume.
- Long-term holder SOPR reveals that investors are selling their holdings at a loss.
Bitcoin price appears to have found some support near $60,000 after yet another bearish week during which it retreated by over 5%. Now everyone is wondering whether the flagship crypto will bounce back or extend the decline.
BTC price sat just below the $60,000 level at the time of writing. It previously bounced off the same level on multiple occasions, which has also fueled the recovery speculations.
More specifically, it continued to demonstrate bearish dominance given that it retreated below $59,400 at press time. On-chain data reflected this observation, and it signaled more Bitcoin price capitulation below $60,000.
CryptoQuant analyst Darkfost noted that Bitcoin unspent transaction output (UTXOs) dropped to levels that were historically consistent with bear market phases.
According to the Bitcoin price analysis, the chart demonstrated a spike in UTXOs spent at a loss. A move that is consistent with capitulation events.
This also mirrored the ongoing bearish market conditions and declining market sentiment. However, this was not the only bearish signal flashing red.
Bitcoin Price Divergence With Taker-Buy Volume Signals Downside Risk
Binance happens to be one of the biggest crypto exchanges in the world. As such, its activity may point to where the Bitcoin market is headed or at least give insights into investor behavior.
Another CryptoQuant analyst under the pseudonym MorenoDV noted that BTC sell pressure cooled down significantly near $60,000. This includes higher lows before the pullback on Sunday.
Bitcoin funding rates also leaned more on the positive side of things. This suggests that derivatives traders may have been expecting price to breakout or bounce back from recent lows.
Meanwhile, the taker-buy volume formed a diverging outcome after adopting more downside.
The analysis noted the rising funding rates, with weak Bitcoin demand in the spot market. This means there was rising speculative positioning in the derivatives market without healthy spot demand to back the bounce-back.
This kind of setup often leads to elevated liquidations, especially if the price goes the other way. In this case, more price weakness will expose Bitcoin (BTC) to more long liquidations.
Are Holders Selling Bitcoin Crypto At A Loss?
The prospects of a Bitcoin price capitulation event mean rising sell pressure. In this case, the sell pressure has to be higher than any accumulation at recent discounted levels.
Interestingly, this comes at a time when Bitcoin ETFs continued to offload their BTC holdings. Moreover, MicroStrategy has been in the spotlight for allegedly having a big impact on declining market confidence.
Bitcoin’s long-term holder SOPR recently slid below 1 this past week. This was the first time it dropped below 1 on the monthly chart since October 2022.
This outcome was noteworthy for a major reason. Whenever the Long-term holder SOPR falls below 1, it usually signals that long-term holders are selling at or near a loss. An outcome that usually occurs when capitulation is expected.
Interestingly, this observation aligned with the latest data on large holder flow data. Whales have also been selling more Bitcoin (BTC) on the spot market than they have been buying during the weekend.
But the big question now is whether Bitcoin price crypto will finally give in to more downside this week or gather enough momentum for a bounce back.
The dynamic nature of the market means either options could still play out. However, the market has so far demonstrated multiple signs leaning in favor of the bears.
