- Long-term Bitcoin holders accumulated less during February’s price dip compared to events like the FTX or Luna crashes, signaling weaker conviction.
- A key metric, the Long-Term Holder Spent Output Profit Ratio, flipped below one for the first time since May 2022, indicating these veterans are realizing losses.
- Analysts point to potential catalysts like the CLARITY Act, further Fed rate cuts, and sustained ETF inflows as keys to a market recovery.
- Glassnode identifies $54,000 as the next critical support level if current pressures continue.
Bitcoin’s most steadfast investors, known as long-term holders, showed their first signs of capitulation in nearly two years this February as prices dipped toward $62,800. This pressure mirrors levels last seen during the May 2022 LUNA crash and marks a significant shift in conviction, according to a note from blockchain analytics firm Glassnode.
Consequently, the 7-day average of the Long-Term Holder Spent Output Profit Ratio fell below one, meaning these veterans are now selling at a loss. This metric had not flipped negative since the bear market of 2022, signaling potential exhaustion among the market’s traditional anchor.
Meanwhile, recent U.S. economic data offered little immediate relief for risk assets like Bitcoin. Stronger-than-expected jobs data dampened hopes for an imminent Federal Reserve rate cut, with markets pricing a 90% probability of unchanged rates in March per CME’s FedWatch tool.
However, not all analysts see a deep correction ahead. Sean McNulty, APAC derivatives trading lead at FalconX, argued the $60,000 level should hold as a near-term floor. “This level has been defended by a massive wall of buyers who recently absorbed the capitulation of short-term holders,” he told Decrypt.
He believes the recent sell-off was an “orderly deleveraging” without a systemic blow-up like FTX, making a further decline unlikely. Key catalysts for recovery, he suggested, include the CLARITY Act, more Fed rate cuts, and sustained ETF inflows.
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