In the last seven days, Bitcoin [BTC] has shown a bearish trend, with a notable decline of 10.77%, marking its biggest drop in the past month.
Over the last 24 hours, the downward movement has persisted, resulting in a 2.38% decrease, signaling the first major market sell-off since August 2024.
Despite the recent losses, historical data indicates a high probability of a significant price recovery in the near future once buying activity picks up again.
Short-term Holders: Influential Factors for a Potential Rally
Short-term holders (STH) hold a critical role in influencing market trends through their responses to market conditions.
During periods like this, observing the STH-SOPR (Spent Output Profit Ratio) in conjunction with Bollinger Bands, a technical tool for identifying overbought and oversold zones, can offer valuable insights into potential price movements.
Historically, when the STH-SOPR falls below the lower Bollinger Band, typically denoted by a red circle on the chart, Bitcoin tends to undergo a robust rally, swiftly recovering losses.
These rebounds have historically ranged between 8% and 42%. Currently, BTC is situated in this phase, suggesting a possible substantial upward movement in the asset if historical patterns repeat.
Promising Prospects despite Significant Market Sell-off
Bitcoin recently witnessed its most substantial market sell-off in 2025, the first since August 2024, primarily driven by new entrants into the market.
This activity led to the sale of 79,000 BTC in the spot market and liquidation of $1.7 billion in derivative contracts, causing BTC to dip below $90,000 for the first time in three months.
Examining the chart reveals that following the major sell-off in August (indicated by the red cloud at the bottom left), Bitcoin’s price (black line) began a steady upward trajectory.
With a similar occurrence in the past 24 hours, BTC now stands a considerable chance of experiencing a sharp upward movement.
However, the extent of the rally hinges on the buying interest. CryptoCrypto has identified growing bullish sentiment in the market.
Increasing Buying Activity
There is a gradual rise in bullish sentiment. Over the last four hours, there has been a substantial short liquidation worth $11.59 million, dwarfing long liquidations at just $663,900.
When short liquidations significantly surpass long liquidations, it suggests a shift against sellers. In this scenario, with short liquidations outnumbering long ones by 17.4 times, robust buying activity is apparent.
Additionally, data on funding rates, a crucial market indicator, indicates a prevailing dominance of long traders. A positive funding rate of 0.0039% reinforces this trend.
If the buying momentum persists, Bitcoin could witness a notable price surge in the upcoming weeks.