Bitcoin [BTC] witnessed a significant drop to a three-month low of nearly $86,000 on February 25th, causing ripples across the market and marking its most substantial quarterly decline of around 20% since August 2024.
This decline follows a period of defending crucial price levels, ultimately shattering Bitcoin’s long-standing market framework and indicating the possibility of extended bearish momentum.
Indicators like the Relative Strength Index (RSI) point towards Bitcoin entering oversold territory, heightening concerns that a rapid recovery may not be on the horizon.
With BTC experiencing a nearly 10% decrease for the week, market sentiment remains wary as investors evaluate the broader impacts of this sharp downturn.
Accumulation by BTC Whales
Despite the downturn, Bitcoin whales have been actively accumulating, signaling a deep-rooted belief in the asset’s long-term direction.
Data from CryptoQuant reveals that on February 24th, whale accumulation addresses received 26,430 BTC—these wallets are typically associated with over-the-counter (OTC) transactions and long-term holdings.
In contrast, short-term holders (STH) have been under pressure, with addresses holding BTC for less than 155 days moving 27,500 BTC at a loss within the previous 24 hours.
This disparity between whale accumulation and short-term capitulation illuminates a crucial phase in Bitcoin’s market cycle, where institutional players are continuing to accumulate assets despite increased volatility.
Notably, an anonymous crypto trader known as CRG highlighted a significant cluster of buy orders on Binance ranging from $84,000 to $86,000, aligning with a vital fair value gap.
Current Bitcoin Price and Future Prospects
Undoubtedly, Bitcoin’s sharp decline triggered a broad market sell-off, pushing sentiment into the ‘extreme fear’ zone for the first time in five months.
While some alternative coins have begun to recover, Bitcoin still faces bearish pressure, with its value hovering around $88,215.21 following a 1.27% decrease in the last 24 hours, as reported by CoinMarketCap.
The uncertain price fluctuations reflect traders’ cautious approach as BTC struggles to regain momentum despite brief respite in the broader market scenario.
Looking ahead, Bitcoin breaking through the $97,927 resistance level could signify a potential shift towards bullishness.
However, if the prevailing bearish trend continues, a further drop below the critical support level of $86,110 remains a distinct possibility.
The market’s next direction will heavily rely on whether Bitcoin garners enough buying power to alter sentiment or if prolonged weakness triggers another wave of selling pressure.
Not surprisingly, Nic Puckrin, the creator of “The Coin Bureau,” succinctly captured the essence when remarking,