- Bitcoin holders have started selling at a loss after making gains for an extended period.
- Key technical indicators showed that bears are in control of the market.
Bitcoins [BTC] According to CryptoQuant data, the adjusted Spent Output Profit Ratio (aSOPR) has fallen below 1 for the first time since October 2023. This suggests that investors are now, on average, selling their holdings at a loss.
Source: CryptoQuant
BTC's aSOPR measures the profit or loss incurred when the coin is spent by its holders. An aSOPR value above 1 means that coins are sold for a profit overall. Conversely, a value below 1 indicates that investors are selling at a loss.
Recent increase in profit-taking
BTC’s recent price drop below $61,500 has resulted in a significant increase in sell-offs among its holders. According to CryptoQuant data, the market has seen an increase in BTC supply on exchanges. Its foreign exchange reserves have increased by 1% in the last seven days.
At the time of this writing, 2.006 million BTC are held on cryptocurrency exchanges. When an asset's reserves increase in this way, it indicates an increase in selling pressure.
Miners have also distributed their holdings to limit losses, causing their reserves to shrink fall to a three-year low. The recent decline in BTC price has resulted in a steady decline in miners' revenue from fees, making coin distribution a more viable option for network miners.
Per Glassnodes According to data, the share of miners' revenue from fees has fallen by 44% since March 6.
Source: Glassnode
Additionally, open interest in the coin’s futures market saw a 14% decline between March 15 and March 20 coin jar' Data.
When open interest on an asset falls in this way, it indicates a decline in the number of outstanding contracts. This is because market participants exit their positions without opening new ones.
At the time of this writing, BTC futures open positions stood at $36 billion.
Do you expect any further disadvantages?
An assessment of BTC price movements on a daily chart revealed that bearish sentiment in the market has increased significantly.
The coin's Moving Average Convergence Divergence (MACD) readings showed that its MACD line crossed below the signal line on March 15, causing the indicator to show only red bars.
The intersection often indicates that an asset's short-term momentum is weakening compared to longer-term momentum.
Realistic or not, here is the market cap of BTC in ETH calculations
This crossover signals a shift towards bearish momentum and is interpreted by traders as a signal to consider selling or taking short positions.
Additionally, BTC's positive directional index (green) was below its negative index (red) at 14.70, confirming that the bears had regained control of the market.
Source: TradingView
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