Bitcoin Declines by 8% Amid Decreased Capital Inflows

The exclusive market statistics indicate a notable 8% decline in the Bitcoin ($BTC) market. As per the data from Glassnode, Bitcoin’s latest 8% dip raises apprehensions among the market onlookers concerning additional downturn. The blockchain analytics platform took to social media to provide insights into Bitcoin’s current downside and the potential future developments.

$BTC is down 8%. In last week’s Week On-Chain, we outlined multiple risk factors: weakening capital inflows, STH cost basis at a key threshold, mixed institutional ETF flows, and historical patterns suggesting extended corrections. What to watch for next? https://t.co/HGwkPZBJDm pic.twitter.com/MsovoSeLih

— glassnode (@glassnode) February 25, 2025

Bitcoin Presents 8% Slump Amid Falling Capital Inflows

Glassnode outlined several risk factors that are responsible for the recent decline in Bitcoin market. They reportedly include fading capital inflows, a crucial short-term holder cost basis level, historical trends, and mixed institutional flows in ETFs. In line with the respective factors, there is a possibility for prolonged corrections in the Bitcoin ecosystem. Overall, the investors appear to be significantly cautious in terms of market participation.

In line with the market data, Bitcoin is presently changing hands below its short-term holder cost basis ($92.5K). The respective level has often played the role of a prominent dividing point between provisional bearish and bullish phases. At the moment, the short-term holder market value to realized value ratio is up to 0.96. This suggests that the short-term holders hold an average of four percent unrealized loss. Subsequently, if the top crypto asset fails to regain this level, it could see a negative development. Hence, it could go through a continued selling pressure coming from recent purchasers.

The previous post-all-time-high corrections reveal that Bitcoin has formerly prolonged losses near the -1σ point below its short-term holder cost basis. Previously, this took place amid the big corrections of May and November in 2021 as well as April and February in 2024. These trends suggest a potential expansion in the downside to the range between $71K and $72K. This is the spot where the present -1σ is placed.

Noteworthy Demand Zone Exists Between $87K and $89K

According to Glassnode, if Bitcoin keeps declining, bears may get additional control over the wider market momentum. While Bitcoin is dropping below its critical short-term holder cost basis, market participants are closely observing the possibility of Bitcoin’s recovery to this threshold. In this respect, an important demand zone ranges from $87K to $89K. On the other hand, a failure could lead to another downward spree ranging from $71K to $72K.

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